Professional Documents
Culture Documents
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Board of Directors
Management
Auditors
Rahul Bajaj
Chairman
Rahul Bajaj
Chairman
Madhur Bajaj
Vice Chairman
Madhur Bajaj
Vice Chairman
Rajiv Bajaj
Managing Director
Rajiv Bajaj
Managing Director
Sanjiv Bajaj
Pradeep Shrivastava
Chief Operating Officer
Kantikumar R Podar
Shekhar Bajaj
D J Balaji Rao
D S Mehta
J N Godrej
S H Khan
Ms Suman Kirloskar
Naresh Chandra
Nanoo Pamnani
Manish Kejriwal
P Murari
Niraj Bajaj
Abraham Joseph
Chief Technology Officer
R C Maheshwari
President
(Commercial Vehicle Business)
Rakesh Sharma
President (International Business)
Eric Vas
President (Retail Finance)
Kevin Dsa
President (Finance)
K Srinivas
President (Motorcycle Business)
S Ravikumar
President
(Business Development and
Assurance)
Amrut Rath
Senior Vice President
(Human Resources)
C P Tripathi
Advisor (CSR)
Chartered Accountants
Cost Auditor
A P Raman
Cost Accountant
Bankers
Central Bank of India
State Bank of India
Citibank N A
Standard Chartered Bank
Bank of America
ICICI Bank
HDFC Bank
Registered Office
Mumbai-Pune Road
Akurdi, Pune 411 035
Works
Mumbai-Pune Road
Akurdi, Pune 411 035
Company Secretary
J Sridhar
aj
l Baj an
u
h
a
R
airm
Ch
j
Baja
hur irman
d
a
M
Cha
Vice
)
ness
Busi
a
arm national
h
S
sh
er
Rake ent (Int
d
i
s
Pre
t
men
op
evel
D
ar
s
m
s
u
vik
sine
S Ra ent (Bu )
d
i
e
s
c
Pre ssuran
A
d
n
a
r
ph
Jose y Office
m
a
g
h
o
l
a
r
o
Ab
hn
f Tec
Chie
ath esident
ut R
r
Amr r Vice P ces)
o
ur
i
o
n
s
e
S
n Re
a
m
(Hu
va
asta
hriv Officer
S
p
ee
ng
Prad Operati
f
e
i
Ch
m
a
e
T
t
n
e
m
e
g
ana
)
ness
si
le Bu
c
s
y
a
c
r
v
to
ini
K Sr ent (Mo
d
i
s
e
Pr
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r
Baja
ecto
Rajiv ging Dir
a
Man
a
)
ance
n Ds
Kevi ent (Fin
d
i
Pres
thi
ripa SR)
T
P
C
(C
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Adv
wari
ess)
hesh
a
usin
M
B
e
l
RC
t
ehic
iden
Pres ercial V
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(Com
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inan
Vas (Retail F
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i
r
E
t
iden
Pres
Chairmans Letter
Dear Shareholder,
In my last two years letter to you, I began with congratulatory words for the management.
This time, it may be useful to start with Indias difficult macroeconomic and policy landscape.
A chairmans letter to shareholders does not normally carry a graph or chart. But when you
look at the steady decline in Indias real (i.e. inflation adjusted) GDP growth over the last
eight quarters, you will agree that a pictorial depiction is in order. As the chart shows, Indias
growth has declined by 3.3 percentage points over the last eight quarters.
It is all too easy, almost convenient, to pin the blame on the post-Lehman global world for
this sharp fall in growth. That is only partly true. For one, Indias GDP is much more driven
by domestic demand than international trade. For another, China, a country with far greater
exports than India, has turned around and has grown by 7.9% in October-December 2012.
Even Indonesia has grown faster than us in the last five quarters, posting 6.1% growth in
October-December 2012.
7.8%
7.7%
6.9%
GDP in %
6.1%
5.3%
5.5%
5.3%
4.5%
4
3
2
1
0
Jan-Mar
2011
Apr-Jun
2011
Jul-Sep
2011
Oct-Dec
2011
Jan-Mar
2012
Apr-Jun
2012
Jul-Sep
2012
Oct-Dec
2012
Unfortunately, the hard truth is that despite growing at over 9% for three successive years
under the first Congress-led United Progressive Alliance government, we failed to create the
necessary infrastructure and investments to maintain healthy growth in difficult times.
Instead of focusing on highways, power, rail, ports and IT networks that are critical for
sustained growth, we steadily raised the nations fiscal deficit to finance consumption-based
subsidies and hand-outs; this in turn caused inflationary pressures; which led to the RBI
imposing high interest rates and a tight monetary regime. Added to these were long
bouts of inaction and uncertainty in governance, leading to a crisis in the power sector, lack of
inter-ministerial clearances of key projects and an unfortunate reversal of a Supreme Court
verdict through retrospective tax amendments.
The outcome: fall in investment and overall bearish expectations leading to steady reduction
in GDP growth.
Those who produce and sell relatively high end consumer durables - such as motorcycles - can
cope with falling growth over three to four quarters. Indeed, your Company successfully did
so last year, and recorded its highest ever sales, exports and profits. To repeat such feats in
what has been the second successive year of quarterly de-growth would have been extremely
difficult. Even so, the results have been noteworthy, and let me share these with you.
l
Despite a difficult market, net sales and other operating income grew by 2.8% to an all-time
high of ` 20,351 crore.
Sales in volume terms reduced marginally by 2.6%. Bajaj Auto sold 4.24 million units versus
4.35 million units in the previous year. This consisted of 3.76 million motorcycles and more
than 480,000 three-wheelers.
Exports, too, were a bit lower than last years 1.55 million units in 2012-13 vis--vis
1.58 million in the earlier year. In revenue terms, however, exports grew by 4.1% to
` 6,713 crore.
Your Companys operating EBITDA, at ` 3,990 crore in 2012-13, was almost the same as in
the previous year. The operating EBITDA margin was 19.6% of net sales and other operating
income. Although this is 60 basis points less than the previous years EBITDA margin, I am
proud of Bajaj Autos management not only earning such a margin in a year as difficult as
2012-13, but also continuing to maintain its top-of-the-league position in profitability.
Profit after tax (PAT) was at ` 3,044 crore marginally higher than the previous year.
Let me touch upon exports which, in the past, have grown very strongly both in volume
and revenue. This year saw a marginal volume shrinkage 1.55 million units compared to
1.58 million in the previous period. In large measure this has to do with a key
market: Sri Lanka, which substantially raised import tariffs on motorcycles and
three-wheelers. Such disturbances occasionally happen in the course of international
business. I am sure your Company will recover from this and grow exports more
significantly in the coming years, even as the global economic environment remains
one of weak growth and uncertainty.
We also need to note that during 2012-13, overall, the Indian Auto Industry grew by 2% and
its domestic sales by 2.6%, despite negative growth in passenger cars and heavy trucks.
And the domestic two-wheeler sales grew by 2.9%. So, even as we are focused on and
committed to profitable growth, we need to redouble our efforts for it.
How do I look at 2013-14? I am neither a soothsayer nor his modern day counterpart an
economist. I am a simple businessman. Despite being an optimist, I do not yet see signs of
substantial recovery in the near future. The decline in the growth may have bottomed out; but
incremental growth will be modest. I shall be pleasantly surprised if India can grow its real
GDP by over 6% in 2013-14.
In such an environment, the domestic market for motorcycles will be very tough.
Your Company will have to fight to gain market share and yet do so in ways that do not
erode its healthy EBITDA margin. It requires great ingenuity, superior tactics, huge capability
and determination. The management and employees of Bajaj Auto, led by Rajiv Bajaj, the
managing director, have more than enough capability to meet the challenge. I exhort them to
do so, with the faith that they can achieve great feats in difficult times. All of us can race with
tailwinds. The real champion races faster with headwinds. If a company can do so in our line
of business, it is Bajaj Auto.
So, join me in wishing everyone in your Company God Speed. May they, along with the
dealers, vendors continue delighting our customers and thus the shareholders through
healthy returns.
Rahul Bajaj
Chairman
t
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Bike
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t
g Wh
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c
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(18
8
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V
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DISC 25 ST
1
rds
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13
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s
ward
els A year
e
h
gW
the
1. Zi
le of
rcyc
c)
Moto to 125c
c
c
(110
15
Motorcycles
Table 1 gives the data of the Companys sale of motorcycles, both domestic and exports.
Industry
(nos.)
Industrys
growth
Bajaj Auto
(nos.)
Bajaj Auto's
Bajaj Auto's
growth market share
2007
7,099,551
14.5%
2,379,499
24.4%
33.5%
2008
6,544,482
(7.8%)
2,139,783
(10.1%)
32.7%
2009
6,806,114
4.0%
1,907,853
(10.8%)
28.0%
2010
8,444,243
24.1%
2,506,791
31.4%
29.7%
2011
10,500,073
24.3%
3,387,043
35.1%
32.3%
2012
11,943,579
13.7%
3,834,405
13.2%
32.1%
2013
11,952,135
0.1%
3,757,105
(2.0%)
31.4%
Note: Industry refers to domestic plus export sales of motorcycles by all manufacturers in India.
Source: SIAM and Company data
In FY2013, Bajaj Auto sold over 3.76 million motorcycles in India and abroad.
This represented a decline of 2% over FY2012. Sales growth was flat for the industry as a
whole. The Companys share of total motorcycles sale fell marginally to 31.4%.
Given extremely muted demand in India, the Company sold 2,463,874 motorcycles in the
domestic market during FY2013, which was 4% lower than in the previous year. Share in the
domestic market was 24.4% as against 25.4% in FY2012. Urban as well as rural markets were
affected by relatively high interest rates on consumer loans, high inflation and a deep sense
of uncertainty. Consumer durable purchase decisions were pushed back, and motorcycles were
no exception. This was particularly true of models belonging to the upper end Performance
segment, which represents a substantial proportion of Bajaj Autos motorcycle business.
Even so, Bajaj Auto continues to lead at the upper end. It sold a total of ~925,000 motorcycles
in the upper end Performance segment in FY2013. Share in domestic market was 47.4%.
The Companys key brand in this segment, Pulsar, is in its 11th year. To create excitement and
increase momentum in the segment, Bajaj Auto launched the next generation Pulsar 200 NS in
May 2012. It has clearly redefined the sports motorcycle segment in India; has brought new
customers to the Pulsar portfolio; and set new benchmarks in terms of performance, style and
technology. It has won as many as 12 awards for product and technology including for the
best product design across the entire automobile industry.
In FY2013, the Discover range had annual sales of ~1.5 million motorcycles. The year saw the
introduction of Discover 100 T, which extends the Discover range to a smaller engine capacity.
It has been designed to complement the Discover 125 ST in terms of all the enhancements,
yet remain sharply focused for those who prefer more fuel efficiency. The Discover 100 T is
powered by a high performance 4-valve air cooled 100 cc DTSi engine coupled with a 5-speed
gear box and Nitrox twin shock absorbers for high quality ride comfort. It is the worlds first
100 cc single cylinder 4-valve DTSi engine and delivers best-in-class power and
fuel efficiency.
KTM is Europes second largest motorcycle manufacturer. Bajaj Auto holds 47.96% stake in the
Company. KTM, known for its racing achievements, dominates the off-road segment across
the world. Bajaj Auto launched the KTM Duke 200 in January 2012, which is being retailed
through exclusive KTM showrooms. With a new four-stroke single-cylinder fuel injection
engine, six-speed transmission and low fuel consumption, the KTM Duke 200 gives maximum
riding fun, powerful propulsion, dynamic cornering and first-class braking, with rear and front
disc brakes.
16
Commercial Vehicles
Three-Wheelers
Bajaj Auto continues to be worlds largest three-wheeler manufacturer.
The development in the three-wheelers segment is best understood by looking at the numbers
given in Table 2.
FY2012
FY2013
Exports
FY2012
Total Three-Wheelers
FY2013
FY2012
FY2013
Industry sales
513,251
538,291
362,876
303,088
876,127
841,379
202,979
226,131
312,176
253,926
515,155
480,057
39.5%
42.0%
86.0%
83.8%
58.8%
57.1%
In FY2013, domestic sales of three-wheelers for the industry as a whole increased by 4.9% to
538,291 units. Despite relatively difficult conditions across various states in terms of securing
road permits and overall market conditions, Bajaj Auto performed better than the industry.
The Companys domestic sales grew by 11.4% to 226,131 units. This growth was largely
driven by growth in Diesel segment where Company witnessed a growth of 25% as against the
industry growth of 9%. Consequently, market share improved by 2.5 percentage points, from
39.5% in FY2012 to 42% in FY2013.
During the previous year, Bajaj Auto had taken a number of initiatives to increase sales which
involved, among others, (i) network correction and expansion, (ii) increasing the share of diesel
vehicles through new initiatives, (iii) generating better financing options for buyers through
public sector banks and otherwise, and (iv) new three-wheeler permits coming to bear in Delhi
and Jaipur. These seem to have borne results.
Exports, however, declined. As Table 2 shows, exports for three-wheelers as a whole from the
country contracted by 16.5% to 303,088 units in FY2013. Since Bajaj Auto accounts for almost
84% of Indias three-wheeler exports, it is not surprising that the Companys exports fell as
well by 18.7% to 253,926 units. A key reason for this fall in exports was Sri Lanka, one of
the most attractive markets for the Company. In May 2012, Sri Lanka significantly raised the
import tariff on three-wheelers. That seriously affected sales. In addition, during
February/March 2013, another major market for exports, Egypt, witnessed difficulties in
opening of Letters of Credit, largely due to short availability of US dollars in that country.
17
f
o
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d
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D
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c
A
n
a
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i
ike
B
m
s
t
Do No. 1 Spor
's
India
International Business
Bajaj Auto remains Indias No. 1 exporter of motorcycles and three-wheelers.
The Company exports to 57 countries, and is a market leader in 12 of these. Though the exports
of motorcycles remained more or less steadythe volume falling by 2% compared to the
previous yearthe big crunch occurred in three-wheelers. The export data are shown in Table 3.
Motorcycles (nos.)
Growth %
1,267,648
1,293,231
2.0%
312,176
253,926
(18.7%)
1,579,824
1,547,157
1,369
1,309
Three-wheelers (nos.)
Total (nos.)
FY2013
(2.1%)
(4.4%)
Exports, ` Crore
34.6
35
31.3
28.2
6,000
28.6
30
23.6
25
4,000
20
3,000
15
2,000
10
1,000
FY2008
FY2009
FY2010
Exports
FY2011
FY2012
7,000
5,000
40
35.0
FY2013
During FY2013, Bajaj Autos exports accounted for ~35% of Net Sales. The Company enjoys a
healthy geographical spread, as shown in Chart E.
At 47% of the total exports, Africa
accounts for the largest share by
volume, followed by Asia and Middle East
at 32%. This is for both motorcycles and
three-wheelers.
20%
32%
1%
20
Discover 125 ST
This completely new platform was designed to take the legacy of the Companys
successful Discover brand into the future. Designed to further enhance the
sporty commuter image of the brand, the Discover 125 ST is equipped with a
high performance four-valve air cooled engine powered by twin spark ignition,
delivering 13 Ps, and a 5 speed gear box suitably synchronised to the power
characteristics of the engine. This provides the joy of a powerful drive while
maintaining the high fuel efficiency for which Discover is known for. It is also
equipped with state-of-the art features like Nitrox mono shock absorber for riding
comfort which is a first for a commuter 125 cc bike. It has swing arms with high
lateral rigidity for improving handling and disc brakes at
front for effective braking. In addition, there is a big and
stylish fuel tank to enhance its overall appeal.
21
Discover 100 T
This product extends the Discover range to a smaller engine capacity. It has been designed to
complement the Discover 125 ST with all the enhancements that it brings to the commuter
segment but with a clear focus on those who prefer more fuel efficiency. The vehicle is
powered by a high performance four-valve air cooled 100 cc DTSi engine delivering
10.2 Ps, with a five- speed gear box. The Discover 100 T is
the worlds first 100 cc single cylinder four-valve DTSi engine
and also delivers best-in-class power and fuel efficiency.
Like the Discover 125 ST, it has features like Nitrox twin
shock absorbers and the same big bike styling of the
Discover stable.
22
The Waluj and Chakan plants won the TPM Award for Excellence in Consistent TPM
Commitment from the JIPM in March 2013.
The Commercial Vehicle Division has been honored with Excellence in Operations Award
in large enterprises category in the Manufacturing Today Awards, 2012.
The Green Manufacturing Excellence Award, 2012 was awarded to the Waluj plant as the
Challenger Award Large Business.
The National Energy Management Award, 2012 has been awarded to the Waluj plant as an
Efficient Energy Unit.
Plant
Waluj
Waluj Subtotal
FY2012
FY2013
As on 31 March 2012
As on 31 March 2013
Motorcycles
1,500,000
Three Wheelers :
600,000
: 1,800,000
Three Wheelers :
600,000
Boxer, Platina,
Discover,
Pulsar and
three-wheelers
2,100,000
2,400,000
1,200,000
Pulsar,
Avenger, Ninja
1,200,000 and KTM
1,800,000
Platina,
Discover,
1,800,000 Boxer
5,100,000
5,400,000
Chakan
Pantnagar
Grand Total
Motorcycles
Product Range
23
Subsidiaries
Bajaj Auto International Holdings BV (BAIH BV)
Bajaj Auto International Holdings BV is a 100% Netherlands based subsidiary of Bajaj Auto
set up in FY2008. BAIH BV initially invested 98.4 million to acquire 24.45% equity stake
in KTM AG (previously KTM Power Sports AG) of Austria, Europes second largest sport
motorcycle manufacturer.
As the co-operation between KTM and Bajaj Auto developed, further investments were made.
During the year, the Company invested a further amount of 33.9 million. As on date BAIH BV
has invested 197.9 million for a 47.96% ownership.
KTM is a sharply positioned brand that leads global off-road and motor-cross segments, with
its products being distributed via 1,100 dealers across the world. It is a brand that connotes
top class products using best-in-class technology and thus enjoys great pricing power.
Realising back-end synergies in development and supply chain and preserving the brand focus
in the front end is the foundation of co-operation between KTM and Bajaj Auto.
In calendar year 2012, KTM sold 107,142 motorcycles, achieving a turnover of 612 million
and a profit of 25.3 million. In the annual general meeting held on 26 April 2013, KTM AG
has declared a dividend of 0.7 per share.
24
Financials
At 19.6%, Bajaj Auto enjoys the highest EBITDA margin in the auto industry. It ranks among
the most profitable automobile companies in the world.
Table 5 gives the summarised Profit and Loss statement of Bajaj Auto Ltd.
FY2012
FY2013
19,827
20,618
947
1,129
18,880
19,489
Operations
Sales
Less : Excise duty
Net Sales
Other operating income
924
862
19,804
20,351
14,053
14,344
71.0%
70.5%
110
124
0.6%
0.6%
539
639
2.7%
3.1%
459
588
2.3%
2.9%
641
666
3.2%
3.3%
15,802
16,361
4,002
3,990
20.2%
19.6%
22
146
164
3,834
3,825
19.4%
18.8%
333
373
326
372
69
4,160
4,266
Exceptional item :
MTM loss
(134)
4,026
4,266
Tax expense
1,022
1,222
3,004
3,044
25
n
i
h
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a
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l
!
a
i
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Ch
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a
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d
u
a
D
Bajaj Auto has a lean and tightly controlled cost structure. Fixed cost form a small part of its
operating income. Consequently, operating profit at 18.8% is well above any other automobile
company in the country.
As on 31 March 2013, VAT refund of approximately ` 1,100 crore is yet to be realised from
the Government of Maharashtra. Such unrealised VAT refunds extended the working capital
cycle of the Company.
Surplus cash and cash equivalents, as on 31 March 2013, stood at ` 5,706 crore versus
` 5,451 crore as on 31 March 2012. The surplus funds are invested in (i) fixed income
securities rated P1+ and equivalent for short term investments, (ii) AA+ and above rated
securities for long term investments, and (iii) fixed deposits with banks.
FY2012
FY2013
19,868
20,466
333
373
20,201
20,839
3,765
3,990
Segment Revenue
Automotive
Investment and others
Total
Segment Results
Profit/(Loss) from each segment before tax
Automotive
Investment and others
326
372
4,091
4,362
23
4,068
4,361
3,045
3,133
Total
Less : Interest
Cautionary Statement
Statements in this Management Discussion and Analysis describing the Companys objectives,
projections, estimates and expectations may be forward looking within the meaning of
applicable laws and regulations. Actual results may differ from those expressed or implied.
28
Corporate
Governance
Bajaj Groups commitment to good corporate governance practices predates SEBI and clause
49 of the listing agreements. Transparency, fairness, disclosure and accountability are the
main thrust to the working of the Bajaj Group. Bajaj Auto Ltd. (BAL or the Company or
Bajaj Auto) maintains the same tradition and commitment.
Given below are the Companys corporate governance policies and practices for 2012-13.
As will be seen, Bajaj Autos corporate governance practices and disclosures have gone well
beyond complying with the statutory and regulatory requirements in accordance with the
provisions of clause 49 of the listing agreement.
Board of Directors
In keeping with the commitment of the management for the principle of integrity and
transparency in business operations for good corporate governance, the Companys policy
is to have an appropriate blend of executive and independent directors to maintain the
independence of the Board, and to separate the Board functions of governance
and management.
Composition
As on 31 March 2013, the Board of Bajaj Auto consisted of sixteen directors, of whom three
directors were executive. Nine out of thirteen non-executive directors were independent.
The Board has no institutional nominee directors.
According to clause 49, if the chairman is executive or a promoter, at least one half of the
Board should consist of non-executive, independent directors. As Table 1 shows,
this provision is met at Bajaj Auto.
29
Board procedures
During 2012-13, the Board of Directors met six times: on 17 May 2012, 18 July 2012,
18 September 2012, 20 October 2012, 16 January 2013 and 21 March 2013. The gap
between any two meetings has been less than four months.
Meetings
attended
Whether
attended last
AGM
Name of director
Category
Rahul Bajaj
Chairman, executive
6/6
Yes
Madhur Bajaj
6/6
Yes
Rajiv Bajaj
6/6
Yes
Sanjiv Bajaj
Non-executive
6/6
Yes
D S Mehta
Non-executive, independent
6/6
Yes
Kantikumar R Podar
Non-executive, independent
4/6
Yes
Shekhar Bajaj
Non-executive
5/6
Yes
D J Balaji Rao
Non-executive, independent
6/6
Yes
J N Godrej
Non-executive, independent
2/6
Yes
S H Khan
Non-executive, independent
6/6
Yes
Ms Suman Kirloskar
Non-executive, independent
6/6
Yes
Naresh Chandra
Non-executive, independent
6/6
Yes
Nanoo Pamnani
Non-executive, independent
6/6
Yes
Manish Kejriwal
Non-executive
6/6
Yes
P Murari
Non-executive, independent
4/6
No
Niraj Bajaj
Non-executive
5/6
Yes
30
In listed
companies
Committee positions
In unlisted public
limited companies As Chairman
As Member
Rahul Bajaj
Madhur Bajaj
Rajiv Bajaj
Sanjiv Bajaj
D S Mehta
Kantikumar R Podar
Shekhar Bajaj
D J Balaji Rao
10
J N Godrej
S H Khan
Ms Suman Kirloskar
Naresh Chandra
11
Nanoo Pamnani
Manish Kejriwal
P Murari
Niraj Bajaj
Notes: Private limited companies, foreign companies and companies under section 25 of the Companies Act, 1956 are excluded for
the above purposes. Only audit committee and shareholders grievance committee are considered for the purpose of committee
positions as per listing agreement.
None of the directors was a member in more than 10 committees, nor a chairman in more
than 5 committees across all companies, in which he/she was a director.
Code of conduct
The Board at its meeting on 30 January 2008 laid down a code of conduct for all directors and
senior management of the Company, which has been posted on the website
www.bajajauto.com
All directors and senior management personnel have affirmed compliance with the code for
2012-13. A declaration to this effect signed by the managing director/chief executive officer
is given in this annual report.
31
Audit committee
Constitution and composition
After the demerger of erstwhile BAL in 2008, the new Bajaj Auto set up its audit committee
in 2008. The Company has been reviewing the working of the committee from time to time
to bring about greater effectiveness in order to comply with various requirements under the
Companies Act, 1956 and clause 49 of the listing agreement. The present audit committee
consists of the following directors:
1.
2.
3.
4.
All members of the audit committee are independent, non-executive directors and are
financially literate as required by clause 49. Moreover, the audit committee has members
who have accounting or related financial management expertise.
Name of director
Category
Non-executive, independent
4/4
S H Khan
Non-executive, independent
4/4
D J Balaji Rao
Non-executive, independent
4/4
Naresh Chandra
Non-executive, independent
4/4
Subsidiary companies
During the year, the audit committee reviewed the financial statements, including the
investments made by the two overseas subsidiaries, viz., PT. Bajaj Auto Indonesia and
Bajaj Auto International Holdings BV, Netherlands. A statement of all significant transactions
and arrangements entered into by the subsidiary companies was regularly placed before
the Board.
Disclosures
A summary statement of transactions with related parties was placed periodically before
the audit committee during the year. Suitable disclosures have been made in the financial
statements, together with the managements explanation in the event of any treatment being
different from that prescribed in accounting standards.
32
The Board has laid down procedures to inform it of the Companys risk assessment and
minimisation procedures. These are periodically reviewed to ensure that management
identifies and controls risk through a properly defined framework.
There were no public issues, rights issues, preferential issues, bonus issues etc. during the year.
During the year, the committee met once on 18 September 2012. Committee deliberated about
the remuneration payable to the managerial personnel, after considering their background, job
profile, past remuneration etc. in comparison with financial position and performance of the
Company, trends in the industry etc. and also referring to a report of a reputed independent
consultant on the subject. The committee then recommended for the consideration of the
Board the revision to be made in the remuneration payable to the managerial personnel.
At this meeting, the terms of reference of the committee were also extended, so as to
formulate the remuneration policy and review the specific remuneration packages with regard
to senior managerial personnel who are one level below the Board.
The committee also noted, at its meeting held on 16 May 2013, that J N Godrej,
S H Khan, Ms Suman Kirloskar and Naresh Chandra were due for retirement by rotation at the
ensuing annual general meeting. The committee recommended for the consideration of the
Board the reappointment of these directors, who are eligible for reappointment at the ensuing
annual general meeting of the Company.
Remuneration of directors
Pecuniary relationship or transactions of
non-executive directors
1. J N Godrej is a director and shareholder of Godrej and Boyce Manufacturing Company Ltd.,
which is a vendor to Bajaj Auto. Purchases of goods from this company have been in the
ordinary course of business and, for the year ended 31 March 2013, amounted to
` 11.85 crore.
2. Shekhar Bajaj is a director of Bajaj Electricals Ltd. During the year under review, the total
value of transactions between Bajaj Auto and Bajaj Electricals Ltd., which has been in the
ordinary course of business, amounted to ` 3.41 crore.
3. Shekhar Bajaj is a director of Hind Musafir Agency Ltd., an accredited travel agency.
During the year under review, the total value of services availed of by Bajaj Auto from
Hind Musafir Agency Ltd., which has been in the ordinary course of business, amounted to
` 14.57 crore.
4. The register of contracts maintained by the Company under section 301 of the
Companies Act, 1956, contains record of the transactions entered into with the above
companies. The register is signed by all the directors present at the respective
Board meetings.
5. A statement showing the disclosure of transactions with related parties as required under
Accounting Standard 18 is set out separately in this annual report.
33
Non-executive directors
Non-executive directors are paid sitting fees and commission on net profits as separately
stated in this report.
Executive directors
Executive directors are entitled to superannuation benefits payable in the form of an annuity
from an approved life insurance company which forms part of the perquisites allowed to
them. No pension is paid by the Company.
The Company has no stock option plans for the directors and hence, it does not form a part of
the remuneration package payable to any executive and/or non-executive director. During the
year under review, none of the directors was paid any performance-linked incentive.
In 2012-13, the Company did not advance any loans to any of the executive and/or
non-executive directors. Table 4 gives details of the remuneration paid or payable to directors
during 2012-13.
Salary and
perquisites
Commission
Total
Name of director
Rahul Bajaj
52,758,920
67,500,000
120,258,920
Madhur Bajaj
32,609,971
51,300,000
83,909,971
Rajiv Bajaj
63,561,516
89,100,000
152,661,516
Sanjiv Bajaj
120,000
600,000
720,000
D S Mehta
120,000
600,000
720,000
Kantikumar R Podar
80,000
400,000
480,000
Shekhar Bajaj
100,000
500,000
600,000
D J Balaji Rao
240,000
1,200,000
1,440,000
J N Godrej
40,000
200,000
240,000
S H Khan
240,000
1,200,000
1,440,000
Ms Suman Kirloskar
120,000
600,000
720,000
Naresh Chandra
240,000
1,200,000
1,440,000
Nanoo Pamnani
200,000
2,500,000
2,700,000
Manish Kejriwal
120,000
600,000
720,000
P Murari
80,000
400,000
480,000
Niraj Bajaj
100,000
500,000
600,000
Notes: Salary and perquisites include all elements of remuneration i.e. salary, allowances and benefits. No bonus, pension or incentive
is paid to any of the directors. The Company has not issued any stock options to any of the directors. The term of executive directors
does not exceed five years.
34
Name of director
Shekhar Bajaj
Niraj Bajaj
Sanjiv Bajaj
503,880
2,189,476
800,448
Manish Kejriwal
D S Mehta
200
20,180
Management
Management discussion and analysis
This is given as a separate chapter in the annual report.
Shareholders
Appointment and/or re-appointment of directors
According to the statutes, at least two third of the Board should consist of directors liable to
retire by rotation. Of these, one third are required to retire every year and, if eligible, may
seek re-appointment by the shareholders. Accordingly, J N Godrej, S H Khan,
Ms Suman Kirloskar and Naresh Chandra retire from the Board by rotation this year and
being eligible offer themselves for re-appointment.
Brief profiles of the retiring directors are given in the notice being issued to the shareholders
of the ensuing annual general meeting of the Company.
Communication to shareholders
Quarterly, half-yearly and annual financial results are published in numerous leading dailies,
along with the official press release. The Company also sends the half-yearly financial results,
along with a detailed write-up, to each household of shareholders.
Bajaj Auto has its own website, www.bajajauto.com, which contains all important public
domain information, including presentations made to the media, analysts and institutional
investors. The website also contains information on matters such as dividend history,
answers to Frequently Asked Questions (FAQs) by the various shareholder categories and
details of the corporate contact persons. All financial and other vital official news
releases are also communicated to the concerned stock exchanges, besides being placed on
the Companys website.
35
Full version of the annual report including the Balance Sheet, Statement of Profit and Loss,
directors report and auditors report, cash flow statement, half-yearly financial statement
and quarterly financial statements.
Shareholding pattern.
22 July 2010
at 11.30 a m.
4th AGM
14 July 2011
at 11.30 a m.
5th AGM
18 July 2012
at 11.30 a m.
36
During the year under review, the committee met on 21 March 2013 to review the status of
investors services rendered. All members except J N Godrej were present at the meeting.
The secretarial auditor as well as company secretary (who is also the compliance officer) were
also present. More details have been furnished in the chapter on General
Shareholder Information.
Pursuant to the circular issued by SEBI in December 2010, dealing with physical unclaimed
share, the Company, after sending three reminders to the concerned shareholders, has already
opened a demat account with HDFC Bank titled as Bajaj Auto Ltd. unclaimed suspense
account, to which all the unclaimed shares stand transferred in terms of the
said circular.
CEO/CFO certification
The CEO and CFO have certified to the Board with regard to the financial statements and other
matters as required by clause 49 of the listing agreement. The certificate is contained in this
annual report.
37
a
c
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e
A
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i
B
1
.
o
N
Non-mandatory
The Company has also complied with most of the non-mandatory requirements as under:
1. The Board
The requirement regarding non-executive chairman is not applicable, since the chairman of
the Company is executive chairman.
None of the nine independent directors of the Company have tenures exceeding a period of
nine years on the Board.
2. Remuneration committee
The Company has a remuneration committee known as Remuneration and Nomination
Committee. A note on this committee is provided in the annual report.
3. Shareholder rights
A half-yearly declaration of financial performance including summary of significant events
in the preceding six months, is sent to each household of shareholders.
4. Audit qualifications
There are no qualifications in the financial statements of the Company for the year 2012-13.
5. Whistle blower policy
The Company has a whistle blower policy to enable its employees to report to the
management their concerns about unethical behavior, actual or suspected fraud or violation
of Companys code of conduct or ethics policy. This mechanism provides safeguards against
victimisation of employees, who avail of the mechanism. This also provides for direct
access to the chairman of the audit committee in exceptional cases. The policy has been
appropriately communicated to the employees within the organisation.
40
General Shareholder
Information
Annual General Meeting
Date
19 July 2013
Time
11.30 a.m.
Venue
Registered office at
Bajaj Auto Ltd. Complex
Mumbai - Pune Road,
Akurdi, Pune - 411 035
Financial calendar
Audited annual results for year ending 31 March
May
June
July
July
October
January
Dividend
The Board of Directors of Bajaj Auto has proposed a dividend of ` 45 per equity share
(450 per cent) for the financial year 2012-13, subject to approval by the shareholders at the
annual general meeting. Dividend paid in the previous year was also ` 45 per equity
share (450 per cent).
Payment of dividend
Dividend will be paid by account payee/non-negotiable instruments or through the National
Electronic Clearing Service (NECS), as notified by the SEBI through the stock exchanges.
In view of the significant advantages and the convenience, the Company will pay dividend
41
through NECS in all major cities to cover maximum number of shareholders, as per applicable
guidelines. Shareholders are advised to refer to the notice of the annual general meeting
for details of action required to be taken by them in this regard. For additional details or
clarifications, shareholders are welcome to contact the registered office of the Company.
Securities and Exchange Board of India (SEBI) vide its circular No. CIR/MRD/DP/10/2013 dated
21 March 2013 has stipulated that all listed Companies shall use approved electronic mode of
payment viz., ECS, NECS, NEFT etc., for the purpose of making payments to the shareholders.
All the shareholders are requested to immediately update their Bank Account No. with 9-digit
MICR Code (either Bank Account No. or 9-digit MICR No. or both) if the same has not been
updated.
Unclaimed dividends
The shareholders who have not encashed their dividend warrants for the years 2007-08
onwards are requested to claim the amount from M/s Karvy Computershare Pvt. Ltd./
registered office of the Company.
As per section 205 of the Companies Act, 1956, any money transferred by the Company to the
unpaid dividend account and remaining unclaimed for a period of seven years from the date
of such transfer shall be transferred to a fund called The Investor Education and Protection
Fund (IEPF) set up by the Central Government. No claims shall lie against the fund or the
Company in respect of amount so transferred.
Further, the Ministry of Corporate Affairs vide its notification dated 10 May 2012 prescribed
the Investor Education and Protection Fund (Uploading of information regarding unpaid and
unclaimed amounts lying with companies) Rules, 2012 which mandates all the companies to
file the particulars of all the unclaimed and unpaid amounts through e-form 5 INV on the web
portal of MCA and subsequently also upload the data on the website of the Company.
The Company has accordingly filed the necessary forms on 31 July 2012 and on
17 October 2012 for the financial year ended 31 March 2011 and 31 March 2012
respectively. The details of unclaimed dividends for the years 2007-08 to 2010-11
have been uploaded on the Companys website on www.bajajauto.com
42
Dematerialisation of shares
Total number of shares dematerialised during 2012-13 was 3,070,663.
Shares held in physical and electronic mode as on 31 March 2013 are as given in Table 1.
Physical
Position as on
31 March 2012
% to total
shareholding
No. of
shares
Net change
during 2012-13
% to total
shareholding
No. of
shares
% to total
shareholding
18,099,727
6.25
21,170,390
7.32
(3,070,663)
NSDL
266,339,456
92.04
263,483,855
91.05
2,855,601
CDSL
4,927,837
1.71
4,712,775
1.63
215,062
271,267,293
93.75
268,196,630
92.68
3,070,663
289,367,020
100.00
289,367,020
100.00
Demat:
Sub total
Total
Stock code
1. BSE, Mumbai
532977
BAJAJ-AUTO
INE917I01010
4. Bloomberg
BJAUT.IN
5. Reuters
BAJA.BO
Address
Exchange Plaza
Bandra-Kurla Complex, Bandra (E),
Mumbai 400 051
During 2012-13, the listing fees payable to these stock exchanges have been paid in full.
43
NSE
Month
High
Low
High
Low
Closing BSE
Sensex
Apr 12
1,757.00
1,578.30
1,758.00
1,578.40
17,318.81
May 12
1,638.50
1,456.55
1,638.90
1,455.10
16,218.53
Jun 12
1,590.00
1,454.00
1,582.40
1,452.80
17,429.98
Jul 12
1,617.00
1,423.10
1,618.30
1,425.10
17,236.18
Aug 12
1,735.50
1,590.00
1,737.45
1,588.60
17,429.56
Sep 12
1,850.00
1,618.90
1,850.10
1,618.00
18,762.74
Oct 12
1,837.00
1,705.00
1,841.10
1,597.50
18,505.38
Nov 12
1,977.00
1,800.00
1,977.85
1,804.30
19,339.90
Dec 12
2,165.00
1,915.10
2,167.35
1,913.55
19,426.71
Jan 13
2,228.95
1,999.00
2,229.00
1,996.00
19,894.98
Feb 13
2,117.85
1,909.00
2,118.30
1,905.00
18,861.54
Mar 13
2,039.15
1,742.25
2,042.20
1,741.80
18,835.77
Price
100
80
BSE Sensex
44
Mar 13
Feb 13
Jan 13
Dec 12
Nov 12
Oct 12
Sep 12
Aug 12
Jul 12
Jun 12
May 12
40
Apr 12
60
Distribution of shareholding
Table 3 gives details about the pattern of shareholding across various categories as on
31 March 2013 and 31 March 2012, while Table 3A gives the data according to size classes
as on 31 March 2013.
Promoters
Friends and associates of promoters
GDRs*
Foreign Institutional Investors
No. of
Shares
31 March 2012
% to total
capital
No. of
Shares
% to total
capital
144,733,132
50.02
144,733,332
50.02
28,894,158
9.99
30,641,279
10.59
66,196
0.02
169,088
0.06
52,671,870
18.20
47,516,700
16.42
9,850,458
3.40
9,290,035
3.21
Mutual Funds
4,033,153
1.39
7,278,439
2.52
222,080
0.08
122,508
0.04
992,342
0.34
1,189,892
0.41
47,903,631
16.56
48,425,747
16.73
289,367,020
100.00
289,367,020
100.00
Others
Total
* Under the deposit agreement, the depository exercises the voting rights on the shares underlying the GDRs as directed by the
promoters of the Company.
Number
Number
69,883
91.01
3,816,167
1.32
501 to 1000
2,337
3.04
1,726,684
0.60
1001 to 2000
1,450
1.89
2,119,379
0.73
2001 to 3000
664
0.86
1,655,025
0.57
3001 to 4000
373
0.49
1,307,228
0.45
4001 to 5000
291
0.38
1,330,204
0.46
5001 to 10000
660
0.86
4,793,281
1.66
1,125
1.47
272,619,052
94.21
76,783
100.00
289,367,020
100.00
No of shares
1 to 500
45
During the year, letters were received from SEBI/ROC/Stock Exchanges/Investors concerning
13 complaints filed by the shareholders on various matters. In respect of each of these
complaints, replies were sent to SEBI/ROC/Stock Exchanges/Investors and no action remained
to be taken at the Companys end.
Outstanding
shares
148
44,375
Nil
Nil
Nil
Nil
148
44,375
Sr No Particulars
i.
ii.
iii.
iv.
Nomination
Individual shareholders holding shares singly or jointly in physical form can nominate a
person in whose name the shares shall be transferable in the case of death of the registered
shareholder(s). The prescribed nomination form will be sent by the Company upon such
request. Nomination facility for shares held in electronic form is also available with depository
participant as per the bye-laws and business rules applicable to NSDL and CDSL.
Plant locations
Bajaj Auto has plants located at the following places:
1.
2.
3.
4.
46
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d
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e
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Th g leg
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i
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Directors' Report
Introduction
The directors present their sixth annual report and the audited statements of accounts for the
year ended 31 March 2013.
The highlights are as under:
Units in Numbers
Two-wheelers
2013
2012
3,757,105
3,834,405
480,057
515,155
Total
4,237,162
4,349,560
Of which Exports
1,547,157
1,579,824
Three-wheelers
Financials
(` In Crore)
Particulars
2013
2012
20,792.74
20,137.02
4,430.74
4,328.03
0.54
22.24
163.97
145.62
4,266.23
4,160.17
(134.00)
4,266.23
4,026.17
Tax expense
1,222.66
1,022.12
3,043.57
3,004.05
3,705.14
2,515.48
6,748.71
5,519.53
305.00
301.00
1,523.45
1,513.39
4,920.26
3,705.14
105.2
103.8
Dividend
The directors recommend for consideration of the shareholders at the ensuing annual general
meeting, payment of a dividend of ` 45 per share, (450 per cent) for the year ended
31 March 2013. The amount of dividend and the tax thereon aggregate to ` 1,523.45 crore.
Dividend paid for the year ended 31 March 2012 was also ` 45 per share (450 per cent).
The amount of dividend and the tax thereon aggregated to ` 1,513.39 crore.
50
Operations
The operations of the Company are elaborated in the annexed Management Discussion and
Analysis Report.
Discover 125 ST
This completely new platform of vehicle was designed to take the legacy of the successful
Discover brand, into the future. The vehicle has been designed to further enhance the sporty
commuter image of the Discover brand. The vehicle is equipped with a high performance
4 valve air cooled engine powered by twin spark ignition, delivering 13 Ps, and a 5 speed gear
box suitably mated to the power characteristics of the engine. This provides the commuter
the joy of a powerful drive, while maintaining high fuel efficiency for which Discover brand
is known for. The vehicle is also equipped with the state-of-the-art features like Nitrox mono
shock absorber for riding pleasure, which is a first for a commuter 125 cc bike.
Discover 100 T
This product complements Discover 125 ST and extends the all new design of
Discover 125 ST to smaller engine capacity. It sharply focuses on the customers who prefer
greater fuel efficiency, but desire all the enhancements. The vehicle is powered by a high
performance 4 valve air cooled 100 cc DTSi engine, delivering 10.2 Ps, with a 5 speed gear
box suitably mated to the power characteristics of the engine. This is the worlds first 100 cc
single cylinder 4 valve DTSi engine and delivers class leading power and fuel efficiency.
51
B) Process
R&D has been working on improving its operations in a number of areas as listed below.
l
Manpower: R&D has been expanding its team size in areas of design, analysis and
validation in order to keep up with the rapidly expanding aspirations of the Company.
Facilities: R&D continued to enhance its design, computing, proto-typing and validation
facilities. Such enhancement efforts have enabled R&D to develop durable and refined
products. A number of new test facilities were put in to validate the durability and
performance of the forthcoming 4 wheelers. The prototyping facilities were also upgraded
to enable building of the prototypes of these vehicles.
Technology: This year, R&D launched the Triple Spark technology for the Pulsar family.
This technology takes the DTS-I performance to the next higher level. It gives best in class
fuel efficiency and performance on a sports bike. This technology went on to win the
Automotive technology of the year award competing in the category of not just
2 wheelers, but in all categories of automobiles.
Total Productive Maintenance (TPM): R&D continues to vigorously pursue the TPM way
of thinking and working. This has yielded excellent results in quality management of
design and validation process. The TPM approach has also been effective in the lead time
reduction on the various critical processes in R&D by elimination of waste.
C) Outgo
The expenditure on research and development during 2012-13 and in the previous year was:
(` In Crore)
Particulars
i.
ii.
2013
2012
Capital
(including technical know-how)
109.19
42.22
Recurring
129.40
113.70
238.59
155.92
1.22%
0.83%
Total
iii. Total research and development expenditure as a
percentage of sales, net of excise duty
Conservation of energy
Company has always been a forerunner in conservation of energy and natural resources.
All manufacturing processes and products are designed for minimising the carbon footprints
and are being continuously upgraded to consistently achieve this goal. Company has a
distinction of having all its plants certified for ISO 14000 and 18000. Company not only
follows Standard Operating Procedures for environment protection and conservation of
resources in all its plants, but also propagates these initiatives throughout its vendor partners
under the initiative of Green Supply Chain.
The energy conservation drive is guided by the principle of 5 Rs (Reuse, Reduce, Recycle,
Remove, Recover). Given below are some of the key initiatives taken during 2012-13 towards
energy and natural resource conservation.
52
Electrical energy saving was achieved by replacing reciprocating compressor with screw
air compressors at Waluj; use of air pressure booster for high pressure application, use of
energy efficient pumps and motors, use of LED/induction lamps for lighting system in plant
and offices.
Water saving was achieved by various measures, such as installation of RO plant, use of air
cooled compressors in place of water cooled compressors; use of breeze air coolers instead
of ARP, use of treated water for horticulture activities.
Initiatives in utilisation of renewable energy were taken during the year. Installation of
solar power plant 20 Kwp at Waluj and installation of light pipes at Waluj and Pantnagar
are the key initiatives to note.
2013
2012
Electricity consumption
1.85
7.86
20.97
Nil
7.49
13.44
Water consumption
LPG/propane consumption
Investment/savings
(` In Crore)
Description
2013
2012
3.67
2.07
2.30
2.14
This chapter may be read with the Business Responsibility Report (BRR), which is part of the
annual report.
International business
Bajaj Auto continues to outperform competition in terms of two and three wheeler exports,
in spite of the grim world economic scenario. We have maintained our leadership position
in exports and have dominated the Indian two and three wheeler export scenario.
Bajaj has exported a total of 1,547,157 two and three wheelers, highlighting the stellar lead
the Company has established against competition.
More details of International Business are set out in the annexed Management Discussion and
Analysis Report.
53
Industrial relations
Industrial relations with staff and workmen across the plants at Akurdi, Waluj, Chakan and
Pantnagar continued to be cordial.
At Pantnagar, wage settlement dated 7 December 2012 was amicably signed in conciliation
between the management and representatives of workmen. The workmen have formed a trade
union on 21 August 2012 under the name and style Bajaj Auto Ltd. Employees Sangh, which
has a majority following.
At Chakan, Vishwa Kalyan Kamgar Sanghatana, the recognised union has given notice of
termination of the existing settlement dated 21 May 2010 as per provisions of The Industrial
Disputes Act, 1947.
Five workmen of BAL-Waluj and two workmen of BAL-Chakan have received Best Worker
(Gunwant Kamgar) Welfare Awards for the year 2012 declared by the Maharashtra Labour
Welfare Board, Mumbai, Government of Maharashtra.
Subsidiaries
PT. Bajaj Auto Indonesia (PT BAI)
In line with the general slow-down in the global economy, Indonesia has posted a GDP growth
rate of 6.3% as against 6.5% recorded in 2011-12.
Two wheeler sales, a true barometer of national economy, had declined to 7.1 million units
from the levels of 8 million units in the previous year, a decline of 11.5%. Restrictions in
financing norms imposed by the central bank relating to two wheeler financing has
contributed significantly to the decline in sale of two wheelers in Indonesia.
PT BAI has also witnessed a declining sales volume trend with billing of 11,198 units in
2012-13 as against 23,337 units done in 2011-12.
The distribution arrangement announced by Bajaj Auto Ltd. in September 2012 with
Kawasaki Motors to market and distribute Pulsar NS motor cycles in Indonesia is expected to
give a new fillip to the growth of exports to Indonesia, from the second half of
financial year 2013-14.
Bajaj Auto International Holdings BV, Netherlands (BAIH BV)
During the year under review, BAIH BV invested further 33.90 million
(approx. ` 236 crore) to increase its stake in KTM AG (KTM) to 47.96%.
In the calendar year 2012, KTM posted robust growth to 107,142 units (up by 32%);
612 million turnover and 25.3 million net profit (up by 22.2%). Proportionate net profit of
11.96 million has been accounted in the consolidated results of Bajaj Auto Ltd.
KTM returned to dividend list with a dividend declaration of 0.70 per share for 2012.
BAIH BV is entitled to receive 3.64 million, being its share of dividends.
During the year, Bajaj Auto produced 26,805 units of KTM Duke Motorcycles. 7,388 Dukes
were sold in India through the 70 strong pro-biking network in India and 18,546 units were
exported to various countries, including Europe, Japan, etc.
Various joint development projects are proceeding well. The next jointly developed product
Duke 390, sporting a high performance engine is scheduled to be launched in first half of
2013-14. Bajaj Auto will produce this model in its Chakan plant.
54
derived from Transparency Internationals Business Principles. This calls for a commitment
to two fundamental actions viz. a zero-tolerance policy towards bribery and development of
practical and effective implementation program.
Directors
J N Godrej, S H Khan, Ms Suman Kirloskar and Naresh Chandra retire from the Board by
rotation this year and being eligible, offer themselves for re-appointment.
that in the preparation of annual accounts, the applicable accounting standards have been
followed along with proper explanation relating to material departures.
that the directors have selected such accounting policies and applied them consistently and
made judgments and estimates that are reasonable and prudent, so as to give a true and
fair view of the state of affairs of the Company at the end of the financial year and of the
profit of the Company for that period.
that the directors have taken proper and sufficient care for the maintenance of adequate
accounting records in accordance with the provisions of the Companies Act, 1956 for
safeguarding the assets of the Company and for preventing and detecting fraud and
other irregularities.
that the annual accounts have been prepared on a going concern basis.
Statutory disclosures
Ministry of Corporate Affairs (MCA) vide circular No.51/12/2007-CL-III dated 8 February 2011
has given general exemption with regard to attaching of the Balance Sheet, Profit and Loss
Account and other documents of its subsidiary companies subject to fulfillment of conditions
mentioned therein. The Company has fulfilled all the necessary conditions in this regard.
Hence, the Company is not attaching the Balance Sheet, Statement of Profit and Loss and other
documents of the subsidiary companies. The summary of the key financials of the Companys
subsidiaries is included in this annual report.
The annual accounts of the subsidiary companies and the related detailed information will
be made available to the members of the Company and its subsidiary companies, seeking
such information at any point of time. The annual accounts of the subsidiary companies will
55
be kept for inspection by any member of the Company at its registered office and also at the
registered office of the concerned subsidiary company.
As required under the provisions of sub-section (2A) of section 217 of the
Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as
amended, particulars of the employees are set out in an annexure to the directors' report.
As per provisions of section 219 (1) (b) (iv) of the said Act, these particulars will be made
available to any shareholder on request.
Particulars regarding technology absorption, conservation of energy and foreign exchange
earnings and outgo required under section 217(1)(e) of the Companies Act, 1956 and
Companies (Disclosure of Particulars in the report of Board of Directors) Rules, 1988 have
been given in preceding paragraphs.
Directors responsibility statement as required by section 217(2AA) of the
Companies Act, 1956 appears in a preceding paragraph.
Certificate from auditors of the Company regarding compliance of conditions of corporate
governance is annexed to this report as Annexure 1.
A cash flow statement for the year 2012-13 is attached to the Balance Sheet.
Corporate governance
Pursuant to clause 49 of the listing agreement with stock exchanges, a separate section titled
Corporate Governance has been included in this annual report, along with the reports on
Management Discussion and Analysis and General Shareholder Information.
All Board members and senior management personnel have affirmed compliance with
the code of conduct for the year 2012-13. A declaration to this effect signed by the
Chief Executive Officer (CEO) of the Company is contained in this annual report.
The CEO and Chief Financial Officer (CFO) have certified to the Board with regard to the
financial statements and other matters as specified in clause 49 of the listing agreement and
the said certificate is contained in this annual report.
56
Auditors report
The observations made in the Auditors Report, read together with the relevant notes thereon
are self-explanatory and hence, do not call for any comments under section 217 of the
Companies Act, 1956.
Auditors
The members are requested to appoint Messers Dalal & Shah, Chartered Accountants, as
auditors for the period from the conclusion of the ensuing annual general meeting till the
conclusion of the next annual general meeting and to fix their remuneration.
In conformity with the directives of the Central Government, the Company has appointed
Mr. A P Raman, cost accountant, ICWA Membership No. 837, with address at Golok, Plot No.13,
Sector No.28, Pradhikaran, Nigdi, Pune - 411 044, as the cost auditor under section 233B of
the Companies Act, 1956 to conduct the cost audit of Bajaj Auto Ltd. for the year 2012-13.
For the year ended 31 March 2012, the due date of filing the cost audit report was
30 September 2012, which was subsequently extended upto 28 February 2013 and the actual
date of filing the cost audit report was 27 February 2013.
Rahul Bajaj
Chairman
16 May 2013
57
Annexure 1
Auditors certificate regarding compliance of
conditions of Corporate Governance
To the members of
Bajaj Auto Ltd.
We have examined the compliance of conditions of Corporate Governance by Bajaj Auto Ltd.,
for the year ended 31 March 2013, as stipulated in clause 49 of the listing agreements of the
said Company with stock exchanges in India.
The compliance of conditions of Corporate Governance is the responsibility of the Companys
management. Our examination was carried out in accordance with the Guidance Note on
Certification of Corporate Governance (as stipulated in clause 49 of the listing agreement),
issued by the Institute of Chartered Accountants of India and was limited to procedures
and implementation thereof, adopted by the Company for ensuring the compliance of the
conditions of Corporate Governance. It is neither an audit nor an expression of opinion on the
financial statements of the Company.
In our opinion and to the best of our information and according to the explanation given to
us, we certify that the Company has complied with the conditions of Corporate Governance as
stipulated in the above mentioned listing agreement.
We state that such compliance is neither an assurance as to the future viability of the
Company nor the efficiency or effectiveness with which the management has conducted the
affairs of the Company.
Anish P Amin
Partner
Membership Number: 40451
Pune: 16 May 2013
58
Annexure 2
Declaration by Chief Executive Officer (CEO)
I, Rajiv Bajaj, Managing Director of Bajaj Auto Ltd. hereby declare that all the Board members
and senior managerial personnel have affirmed for the year ended 31 March 2013 compliance
with the code of conduct of the Company laid down for them.
Rajiv Bajaj
Managing Director
Pune: 16 May 2013
Annexure 3
Certificate by Chief Executive Officer (CEO) and
Chief Financial Officer (CFO)
We, Rajiv Bajaj, Managing Director and Kevin Dsa, President (Finance) of Bajaj Auto Ltd.,
certify to the Board:
1. That we have reviewed the financial statements and the cash flow statements for the year
ended 31 March 2013 and that to the best of our knowledge and belief;
l
these statements do not contain any materially untrue statement nor omit any material
fact or contain statements that might be misleading, and
these statements together present a true and fair view of the Company's affairs and are
in compliance with the existing accounting standards, applicable laws and regulations.
2. That there are, to the best of our knowledge and belief, no transactions entered into by the
Company during the year, which are fraudulent, illegal or violative of the Company's code
of conduct;
3. That we accept responsibility for establishing and maintaining internal controls for
financial reporting, we have evaluated the effectiveness of the internal control systems of
the Company pertaining to financial reporting and we have disclosed to the auditors and
the audit committee, deficiencies in the design or operation of such internal controls, if any,
of which we are aware and the steps that we have taken or propose to take to rectify the
identified deficiencies; and
4. That we have informed the auditors and the audit committee of
i.
significant changes in internal control over financial reporting during the year;
ii. significant changes in accounting policies during the year and that the same have been
disclosed in the notes to the financial statements; and
iii. instances of significant fraud of which we have become aware and the involvement
therein, if any, of the management or an employee having a significant role in the
Company's internal control system over financial reporting.
Rajiv Bajaj
Managing Director
Pune: 16 May 2013
Kevin Dsa
President (Finance)
59
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A) By the Company
Code of conduct and affirmative action
Your Company believes that its success is inter-linked with the well-being of all sections
of the society and equal opportunity for all sections. The Company continues to ensure no
discrimination of any type to socially disadvantaged sections in the work place.
During the year under review, the Company recruited 2,031 new employees, of which 197
nos. (9.70%) belong to weaker sections in line with the affirmative action. As against 7.63%
as on 31 March 2012, the corresponding figure was 7.2% as on 31 March 2013.
Education
Under Public Private Partnership (PPP), the Company has undertaken to upgrade 4 Industrial
Training Institutes (ITI) - two in Pune, one in Aurangabad and one in Pantnagar.
The Company took actions to ensure better quality of output from the Institutes. In ITI Mulshi,
56 additional students have been added in 3 trades, under PPP. At Ramgarh in Pantnagar,
a new building was inaugurated by the Chief Minister of Uttarakhand and 136 students have
been added in 3 trades (2 shifts each) under PPP. The Company also followed up with the
concerned agencies for approval of Institute Development Plan for ITI Haveli and Aurangabad.
Health
Government of India - Ministry of Health and Family Welfare - National AIDS Control
Organisation (NACO) and CII have initiated Public Private Partnership (PPP) in order to provide
better healthcare to AIDS patients.
62
From August 2008, the Bajaj YCMH ART Centre at YCM hospital has registered
8,886 patients with 4,319 active cases for Anti Retroviral Therapy. This centre is a benchmark
for new centres and is the largest one run by Industry. In view of the exceptional quality of
performance, 4 Link ART centres have been attached to this Bajaj YCMH ART centre.
Others
Our factory employees organised a blood donation camp, in which 556 employees donated
blood for the hospitals in the respective areas.
The Companys fire department vehicles made 25 calls outside the plants for fire fighting and
rescue operations during the year under review.
Awards
The Foundation gives four Awards annually - each of the value of ` 5 lakh. Of these, three are
given to individuals in India for outstanding contribution in the fields of constructive work on
Gandhian lines, application of science and technology for rural development and uplift and
welfare of women and children. The fourth one is an international award - given to individuals
other than Indian citizens from foreign countries for their contribution to the promotion of
Gandhian values outside India.
63
To commemorate the occasion, a cultural programme was also held at JBGVS in which
Madhur Bajaj was the chief guest and in which trustees, sarpanches and prominent
personalities were present and felicitated.
During the year, JBGVS implemented several programmes to strengthen primary education,
primary health care, improving socio-economic condition and environmental development.
Our programmes touched the lives of 28,000 people, comprising people from Scheduled Caste,
Scheduled Tribe, Nomadic Tribes and Other Backward Class. JBGVS programmes covered 65%
people from economically weak and socially backward communities.
Primary education
Primary education has been the major area of intervention in the villages. We supported
infrastructure development of primary schools and anganwadis (pre-primary schools) by
repairing school rooms and providing furniture and equipment. Three user-friendly sanitation
complexes have been constructed in partnership with FICCI Ladies Organisation, Mumbai
and local Gram Panchayat. Special efforts were taken to check malnutrition by conducting
awareness and training programmes for mothers on importance of breast feeding, nutritious
food using local materials, special check-up camps etc. Non-formal educational programmes
for children in primary schools were organised involving secondary school students from the
villages. These programmes are aimed at generating interest of children in education. In the
year under review, JBGVS installed 4 E-learning units in the schools that changed the face of
education in the rural areas. Through various short training programmes, teachers and
parents were motivated to actually participate and improve the quality of education.
Special programmes on health-related issues and HIV/AIDS were organised for adolescent
boys and girls in the schools.
Economic development
Agriculture is the main occupation in the villages, where JBGVS works. Programmes, like
soil testing, demonstration plots for improved variety of seeds and fertilisers, improved
agricultural practices, natural farming, promotion of horticulture etc. were implemented in all
the project areas. Various types of farm and non-farm based vocational training programmes
i.e. dairy, poultry, goatry, two wheeler repairing, fashion designing etc. were organised.
In Wardha, JBGVS has been working in partnership with Ministry of Small and Medium
Enterprises (MSME) for conducting vocational training programmes.
JBGVS has been working in partnership with Rotary Club of Poona North for implementation
of Kamdhenu cow project.
Cows distributed
100
Copartners
100
64
99,000 ltrs
` 17.82 lakh
In Kasi ka bas village of Sikar district, a revolving fund of ` 123,500 created by JBGVS has
helped 32 SHGs to get ` 1,923,000 loan from bank to start income generation activities like
goatry, dairy, small enterprises, etc.
Environmental development
Wardha is one of the drought-prone districts of Maharashtra. During summer, drinking
water becomes scarce and women have to travel long distance to fetch water. Last year
JBGVS completed water conservation work in 5 villages of Wardha district by deepening of
nullah. The ponds created on these nullahs helped in increasing water storage in the wells
downstream. This solved the drinking water problem of these 5 villages. Villagers are now
very happy. After a survey, it has been decided to carry on similar work in 102 water scarce
villages in coming months.
No. of nullah treated
59 TCM
2,600
Social development
Local leadership plays an important role in the development of villages. JBGVS organised
various types of leadership development programmes for local youth, women, adolescent girls
and boys etc. The Government invited JBGVS to train the newly elected women members of
Gram Panchayats in Maval and Khed blocks of Pune district. We supported sports competitions
and procurement of sports equipments. Support was also provided to promote local cultures
and celebrate various festivals. 31 new Self Help Groups (SHG) consisting of 380 women were
formed and they were motivated to take up village development activities, in addition to their
regular savings and credit programmes.
Urban development
Samaj Seva Kendra (SSK) is the urban development wing of JBGVS. It has a total membership
of 1,057 families. SSK provides facilities for social, education, cultural and economic
development to the residents of Akurdi, Nigdi and adjoining areas. During the year, various
types of programmes like pre-primary class, balbhavan, literacy, tailoring, yoga, karate, tabala
and harmonium, classical and western dance, senior citizen programmes etc. were carried
out. A senior citizens' club with over 100 members has also been started. Various special
programmes, like medical check-up, study tour etc. are being organised for them.
Summer camp for school children got very good response. 374 children attended
summer camps in two batches. The library has 67 members and 659 books on subjects
ranging from stories, novels, tailoring, nutrition, health care, autobiographies etc. A few
vocational training programmes, like beauty parlour, basic tailoring, fashion designing
and mobile handset repairing were also conducted. About 100 youth mostly women were
benefitted from these programmes. It has been decided to start a Samaj Kalyan Kendra at
Aurangabad and Sikar.
65
Its Agriculture College, Engineering Polytechnic and Science College enjoy good rating by
external agencies. Its Agriculture Diploma course consistently delivers over 90% result.
It has well developed infrastructure and a positive work culture. All its colleges, barring the
one at Nagpur, run in a single shift to encourage greater student-teacher interaction and
extra-curricular activities. It has over 700 computers with extensive internet access.
During the year under review, its Science College had the distinction of being awarded a
` 1 crore Star College grant by the Department of Biotechnology, the only college in
Vidarbha to have been so chosen.
In 1937, Shiksha Mandal had the privilege of hosting Indias first Education conference, which
was presided over by Gandhiji. To commemorate its 75th Anniversary, a seminar was held in
which Prof. Mushirul Hasan, ex-Vice Chancellor of Jamia Millia, Dr. Krishna Kumar,
ex-Director of NCERT and Prof. Anil Sadgopal, Founder of the Hoshangabad Science
Experiment participated.
15 of its students appeared in merit lists of the University. Its students excel at sports. 24 of
them represented the state and 93 represented the University. 3 of them won medals at the
national level. Its students are very active in extra-curricular activities. This year, one student
from the Polytechnic has made it to the national level in a technical contest.
For meritorious students, free-ships are also provided by Shiksha Mandal. Thus, no meritorious
student is denied admission due to inability to pay fees.
Shiksha Mandal, not only focuses on the academic and personal development of students, but
also works on making them employable. It runs successful guidance programs for Chartered
Accountancy, Company Secretaryship and competitive exams for jobs in banks.
Shiksha Mandal is connected to the community it operates in. It has been running a
Community Polytechnic since 1984, where school drop-outs are trained, at Wardha and
5 village centres, in technical trades. It has been involved in a number of national level
agricultural programs.
In 2012-13, its colleges received over ` 3 crore funding from the University Grant Commission
for various facilities including Library, Girls' Hostel etc. A ` 20 lakh grant was sanctioned by
AICTE for up-gradation of its engineering laboratories.
Its annual non-recurring expenditure now exceeds ` 5 crore. This is funded by Bajaj group
trusts, external agencies and internal accruals. The Bajaj group trusts have donated to
Shiksha Mandal around ` 19 crore in the last 5 years.
68
69
General
The Group has about 40 Public Charitable Trusts, which are also engaged in many topical and
socially relevant CSR activities and initiatives by donating to worthy organisations. Narrative
above is not exhaustive, but only illustrative to give a glimpse of the importance being given
by the Company and the Group towards its Social Responsibilities.
Refer web links
http://www.bajajauto.com/csr.asp
http://www.bajajelectricals.com/beyond-profits.aspx
http://www.jamnalalbajajfoundation.org/
http://www.narishakti.org/
http://www.shikshamandal.org/
Contact: csr@bajajauto.co.in for more information.
70
e
n
o
l
a
d
n
a
t
S
l
a
i
c
n
a
s
n
t
Fi
n
e
m
e
t
a
t
S
72
73
Name of the
statute
Nature of dues
Excise Duty
Commissioner Appeals
CEGAT
High Court
Supreme Court
Sales Tax
Additional demand
received on the basis of
Assessment Order
Additional demand
received on the basis of
Assessment Order
Additional demand received on
account of entry tax
Income Tax
Service Tax
Denial of credit
Customs Duty
Joint Commissioner of
Sales tax
Tribunal
High Court
CIT (Appeals)
High Court
CESAT
High Court
10. The Company has no accumulated losses as at the end of the financial year and it has not incurred any cash losses in the
financial year ended on that date or in the immediately preceding financial year.
11. As the Company does not have any borrowings from any financial institution or bank nor has it issued any debentures as at
the Balance Sheet date, the provisions of clause 4(xi) of the Order are not applicable to the Company.
12. The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and
other securities. Therefore, the provisions of clause 4(xii) of the Order are not applicable to the Company.
13. As the provisions of any special statute applicable to chit fund/nidhi/mutual benefit fund/societies are not applicable to the
Company, the provisions of clause 4(xiii) of the Order are not applicable to the Company.
14. In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments.
Accordingly, the provisions of clause 4(xiv) of the Order are not applicable to the Company.
15. In our opinion, and according to the information and explanations given to us, the terms and conditions of the guarantees
given by the Company for loans taken by others from banks or financial institutions during the year, are not prejudicial to the
interest of Company.
16. The Company has not raised any term loans. Accordingly, the provisions of clause 4(xvi) of the Order are not applicable
to the Company.
17. The Company has not raised any loans on short term basis. Accordingly, the provisions of clause 4(xvii) of the Order are not
applicable to the Company.
18. The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained
under section 301 of the Act during the year. Accordingly, the provisions of clause 4(xviii) of the Order are not applicable
to the Company.
74
Anish P Amin
Partner
Membership Number: 40451
Pune: 16 May 2013
75
Note No.
2013
2012
289.37
289.37
7,612.58
5,751.70
7,901.95
6,041.07
Non-current liabilities
Long-term borrowings
71.27
97.48
115.10
48.44
122.06
157.07
Long-term provisions
134.61
111.85
443.04
414.84
Current liabilities
Trade payables
1,979.61
1,957.79
546.16
604.33
Short-term provisions
1,607.86
2,066.05
Total
4,133.63
4,628.17
12,478.62
11,084.08
ASSETS
Non-current assets
Fixed assets
Tangible assets
1,804.43
1,479.59
Intangible assets
2.14
Capital work-in-progress
Intangible assets under development
223.29
11.77
70.26
29.88
2,097.98
1,523.38
Non-current investments
10
3,719.15
3,786.21
11
462.39
600.87
13
1.02
1.43
6,280.54
5,911.89
Current assets
Current investments
10
2,711.33
1,096.60
Inventories
14
636.28
678.53
Trade receivables
12
767.58
422.79
15
558.85
1,653.83
11
1,311.72
1,024.85
13
Total
Summary of significant accounting policies followed by the Company
The accompanying notes are an integral part of the financial statements
In terms of our report of even date
For Dalal & Shah
Firm Registration Number: 102021W
Chartered Accountants
Anish P Amin
Partner
Membership Number: 40451
Pune: 16 May 2013
76
J Sridhar
Company Secretary
212.32
295.59
6,198.08
5,172.19
12,478.62
11,084.08
1
Rahul Bajaj
Madhur Bajaj
Rajiv Bajaj
Chairman
Vice Chairman
Managing Director
Sanjiv Bajaj
D S Mehta
Kantikumar R Podar
D J Balaji Rao
S H Khan
Suman Kirloskar
Naresh Chandra
Nanoo Pamnani
Manish Kejriwal
P Murari
Niraj Bajaj
Shekhar Bajaj
Directors
Note No.
Sales
Less: Excise duty
Net sales
Other operating revenue
2013
2012
20,617.87
19,827.03
1,128.91
946.76
19,488.96
18,880.27
508.29
648.71
16
19,997.25
19,528.98
Other income
17
795.49
608.04
20,792.74
20,137.02
Expenses:
Cost of raw material and components consumed
18
13,523.74
13,445.54
19
858.83
751.15
20
24.00
(94.15)
21
639.48
540.11
Finance costs
22
0.54
22.24
163.97
145.62
1,378.80
1,215.77
(62.85)
(49.43)
16,526.51
15,976.85
4,266.23
4,160.17
(134.00)
4,266.23
4,026.17
1,156.00
1,003.39
66.66
18.73
1,222.66
1,022.12
3,043.57
3,004.05
105.2
103.8
Depreciation
Other expenses
23
24
26
J Sridhar
Company Secretary
1
Rahul Bajaj
Madhur Bajaj
Rajiv Bajaj
Chairman
Vice Chairman
Managing Director
Sanjiv Bajaj
D S Mehta
Kantikumar R Podar
D J Balaji Rao
S H Khan
Suman Kirloskar
Naresh Chandra
Nanoo Pamnani
Manish Kejriwal
P Murari
Niraj Bajaj
Shekhar Bajaj
Directors
77
I.
2013
2012
Operating activities
Profit before tax
4,266.23
4,026.17
Adjustments:
Add:
i) Depreciation
ii) Provision for diminution in value of investment in the
Company's subsidiary, PT. Bajaj Auto Indonesia
iii) Valuation (gains)/losses of derivative hedging instruments
iv) Amount written off against technical know-how
v) Amount written off against leasehold land
vi) Loss on assets sold, demolished, discarded and scrapped
Provision for doubtful debts and advances
viii) Interest expense
163.97
145.62
35.52
(131.92)
134.00
2.14
2.14
0.66
0.65
7.04
7.49
4.92
9.95
0.54
22.24
82.87
322.09
Less:
i) Investment income included in above:
Interest on long-term investments
259.07
275.56
41.72
42.76
48.23
33.09
(6.03)
0.15
0.14
23.59
(18.64)
372.76
326.88
5.15
1.86
7.17
9.65
68.95
(454.03)
(338.39)
3,895.07
4,009.87
(131.25)
(62.10)
(199.59)
246.31
(0.46)
78
42.25
(343.33)
297.81
(501.13)
350.77
(20.17)
(19.20)
3,373.77
4,341.44
(1,239.40)
(1,148.27)
2,134.37
3,193.17
2,134.37
3,193.17
2013
Brought forward
2012
2,134.37
3,193.17
(231.86)
(68.14)
(1,352.67)
(93.93)
472.51
(478.17)
(508.18)
(360.88)
20.07
22.97
(40.38)
(29.88)
(1,640.51)
(1,008.03)
259.07
275.56
41.72
42.76
48.23
33.09
(6.03)
0.15
0.14
23.59
(18.64)
372.76
326.88
Carried forward
(10.01)
(0.76)
362.75
326.12
(1,277.76)
(681.91)
856.61
2,511.26
79
2013
Brought forward
2012
856.61
2,511.26
(134.31)
(23.53)
(0.54)
(22.24)
41.70
(31.88)
(9.34)
(10.39)
(1,299.66)
(1,154.26)
(211.24)
(187.77)
(1,479.08)
(1,564.38)
(622.47)
946.88
1,172.75
225.87
550.28
1,172.75
[Opening balance]
Cash and cash equivalents as at 1 April 2013
[Closing balance]
80
J Sridhar
Company Secretary
Rahul Bajaj
Madhur Bajaj
Rajiv Bajaj
Chairman
Vice Chairman
Managing Director
Sanjiv Bajaj
D S Mehta
Kantikumar R Podar
D J Balaji Rao
S H Khan
Suman Kirloskar
Naresh Chandra
Nanoo Pamnani
Manish Kejriwal
P Murari
Niraj Bajaj
Shekhar Bajaj
Directors
The Company follows the mercantile system of accounting and recognises income and expenditure on an accrual basis
except in case of significant uncertainties.
ii) Financial Statements are prepared under the Historical cost convention. These costs are not adjusted to reflect the impact
of changing value in the purchasing power of money.
iii) Estimates and Assumptions used in the preparation of the financial statements and disclosures are based upon
managements evaluation of the relevant facts and circumstances as of the date of the Financial Statements, which may
differ from the actual results at a subsequent date.
2) Revenue recognition:
a) Sales:
i)
Domestic Sales are accounted for on dispatch from the point of sale.
ii) Export sales are recognised on the date of the Mate's Receipt/shipped on Board and initially recorded at the relevant
exchange rates prevailing on the date of the transaction.
b) Export incentives:
Export incentives are accounted for on export of goods if the entitlements can be estimated with reasonable accuracy and
conditions precedent to claim are fulfilled.
c) Income:
The Company recognises income (including rent etc.) on accrual basis. However, where the ultimate collection of the same
lacks reasonable certainty, revenue recognition is postponed to the extent of uncertainty.
(1) Interest income is accrued over the period of the loan/investment and net of amortisation of premium/discount with
respect to fixed income securities, thereby recognizing the implicit yield to maturity, with reference to coupon dates,
where applicable. However, income is accrued only where interest is serviced regularly and is not in arrears, as per
the guidelines framed by the management.
(2) Dividend is accrued in the year in which it is declared whereby a right to receive is established.
(3) Profit/loss on sale of investments is recognised on the contract date.
3) Fixed assets and depreciation
(A) Fixed assets
i)
Fixed assets except freehold land are carried at cost of acquisition, construction or at manufacturing cost, as the case
may be, less accumulated depreciation and amortisation. Freehold land is carried at cost of acquisition.
ii) Land and buildings acquired/constructed, not intended to be used in the operations of the Company are categorised as
investment property under Investments and not as Fixed assets.
81
Notes to financial statements for the year ended 31 March 2013 (Contd.)
1 Summary of significant accounting policies followed by the Company (Contd.)
(B) Depreciation and amortisation:
(a) Leasehold land
Premium on leasehold land is amortised over the period of lease.
(b) On other Fixed assets
Depreciation is provided at the rates specified in Schedule XIV of the Companies Act, 1956 or at rates computed with
reference to the economic life of the assets where the estimated economic life is shorter than the life inferred by the
Schedule XIV rates.
i.
Depreciation on additions is being provided on prorata basis from the month of such additions.
ii. Depreciation on assets sold, discarded or demolished during the year is being provided at their rates upto the
month in which such assets are sold, discarded or demolished.
4) Intangible assets
a) Technical know-how acquired
Expenditure on technical know-how acquired (including Income-tax and R&D cess) is being amortised equally over a
period of six years.
b) Technical know-how developed by the Company
i)
Expenditure incurred on know-how developed by the Company, post research stage, is recognised as an intangible
asset, if and only if the future economic benefits attributable are probable to flow to the Company and the costs can
be measured reliably.
ii) The cost of technical Know-how developed is amortised equally over its estimated life i.e. generally three years.
5) Investments
a) Fixed income securities remaining with the Company on vesting of the manufacturing undertaking of erstwhile
Bajaj Auto Ltd., are carried at their fair market values as at 1 April 2007 where the carrying costs of such
investments were higher on that date, less amortisation of premium/discount thereafter, as the case may be.
b) Other fixed income securities are carried at cost, less amortisation of premium/discount, as the case may be, and
provision for diminution, if any, as considered necessary.
c) Investments other than fixed income securities intended to be held for a long term are valued at cost of acquisition,
less provision for diminution as necessary.
d) Investments with maturity of less than 3 months from the date of acquisition are classified as cash and cash equivalents.
e) Investments made by the Company are, generally, of a long-term nature, hence diminutions in value of quoted and
unquoted investments are not considered to be of a permanent nature. However, current investments, representing fixed
income securities with a maturity less than 1 year and investment not intended to be held for a period more than 1 year,
are stated at lower of cost or fair value.
f)
The management has laid out guidelines for the purpose of assessing likely impairments in investments and for making
provisions based on given criteria. Appropriate provisions are accordingly made, which in the opinion of the management
are considered adequate.
g) Investment property is carried at cost, less depreciation computed in the manner prescribed for Fixed assets.
6) Inventories
Cost of inventories have been computed to include all costs of purchases, cost of conversion and other costs incurred in
bringing the inventories to their present location and condition.
a) Finished stocks of vehicles, auto spare parts and work-in-progress are valued at cost or net realisable value whichever
is lower. Finished stocks of vehicles lying in the factory premises, branches, depots are valued inclusive of excise duty.
82
Notes to financial statements for the year ended 31 March 2013 (Contd.)
1 Summary of significant accounting policies followed by the Company (Contd.)
b) Stores, packing material and tools are valued at cost arrived at on weighted average basis. However, obsolete and slow
moving items are valued at cost or estimated realisable value whichever is lower.
c) Raw materials and components are valued at cost arrived at on weighted average basis or lower of cost and net realisable
value, as circumstances demand. However, obsolete and slow moving items are valued at cost or estimated realisable
value whichever is lower.
d) Machinery spares and maintenance materials are charged out as expense in the year of purchase. However, machinery
spares forming key components specific to a machinery and held as insurance spares are capitalised along with the cost
of the asset.
e) Goods in transit are stated at actual cost incurred upto the date of Balance Sheet.
7) Foreign currency transactions
a) Monetary items of current assets and liabilities in foreign currency outstanding at the close of financial year are
revalorised at the appropriate exchange rates prevailing at the close of the year.
b) The gain or loss on decrease/increase in reporting currency due to fluctuations in foreign exchange rates, in case of
monetary current assets and liabilities in foreign currency, are recognised in the Statement of Profit and Loss in the
manner detailed in note 37 to financial statements.
c) Fixed assets purchased at liaison offices in foreign exchange are recorded at their historical cost computed with reference
to the average rate of foreign exchange remitted to the liaison office.
d) Foreign exchange contracts/derivatives:
i)
Cash flow hedges Changes in the fair value of a derivative hedging instrument that qualify for hedge accounting as per the principles of
hedge accounting and designated as a cash flow hedge are recognised as Hedge reserve and presented within Reserves
and surplus, to the extent that the hedge is effective. To the extent that the hedge is ineffective, changes in fair value
are recognised in the Statement of Profit and Loss. If the hedging instrument no longer meets the criteria for hedge
accounting, expires or is sold, terminated or exercised, then hedge accounting is discontinued prospectively.
The cumulative gain or loss previously recognised in Hedge reserve, remains there until the forecast transaction occurs.
When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting,
any cumulative gain or loss existing in equity at that time is recognised in the Statement of Profit and Loss. When a
forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in Hedge reserve is
immediately transferred to the Statement of Profit and Loss. Refer note 25 to financial statements for disclosure.
ii) Profits and losses arising from either cancellation or utilisation of contracts are recognised in the Statement of Profit
and Loss as detailed in note 37 to financial statements.
8) Research & Development expenditure
Research and Development Expenditure is charged to revenue under the natural heads of account in the year in which
it is incurred. Payments for R&D work by contracted agency are being expensed out upto the stage of completion.
However, expenditure incurred at development phase, where it is reasonably certain that outcome of research will be
commercially exploited to yield economic benefits to the Company, is considered as an Intangible asset and accounted
in the manner specified in clause 4 b) above.
9) Employee benefits
a) Privilege leave entitlements
Privilege leave entitlements are recognised as a liability, in the calendar year of rendering of service, as per the rules of
the Company. As accumulated leave can be availed and/or encashed at any time during the tenure of employment the
liability is recognised at the actuarially determined value by an appointed actuary.
b) Gratuity
Payment for present liability of future payment of gratuity is being made to approved Gratuity Fund, which fully covers
the same under Cash Accumulation Policy of the Life Insurance Corporation of India (LIC) and Bajaj Allianz Life Insurance
Company Ltd. (BALIC). However, any deficit in plan assets managed by LIC and BALIC as compared to the actuarial liability
is recognised as a liability.
83
Notes to financial statements for the year ended 31 March 2013 (Contd.)
1 Summary of significant accounting policies followed by the Company (Contd.)
c) Superannuation
Defined contribution to Superannuation fund is being made as per the scheme of the Company.
d) Provident fund contributions are made to Company's Provident Fund Trust. Deficits, if any, of the fund as compared to
actuarial liability is to be additionally contributed by the Company and hence recognised as a liability.
e) Defined contribution to Employees Pension Scheme 1995 is made to Government Provident Fund Authority.
10) Taxation
a) Provision for tax is made for the current accounting period (reporting period) on the basis of the taxable profits computed
in accordance with the Income Tax Act, 1961.
b) Deferred tax resulting from timing difference between book profits and taxable profits are accounted for to the extent
deferred tax assets and liabilities are expected to crystalise with reasonable certainty. However, in case of deferred tax
assets, representing unabsorbed depreciation or carried forward losses, are recognised, if and only if there is virtual
certainty that there would be adequate future taxable income against which such deferred tax assets can be realised.
Deferred tax is recognised on adjustments to revenue reserves to the extent the adjustments are allowable as deductions
in determination of taxable income and they would reverse out in future periods.
11) Provisions and contingent liabilities
The Company creates a provision when there is present obligation as a result of a past event that probably requires an
outflow of resources and a reliable estimate can be made of the amount of the obligation such as product warranty costs.
A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but
probably will not, require an outflow of resources. When there is a possible obligation or a present obligation in respect of
which the likelihood of outflow of resources is remote, no provision or disclosure is made.
84
Notes to financial statements for the year ended 31 March 2013 (Contd.)
2 Share capital
(` In Crore)
2013
2012
Authorised:
300,000,000 equity shares of ` 10 each
300.00
300.00
289.37
289.37
289.37
289.37
a. Further, of the above:144,683,510 equity shares were allotted as fully paid bonus shares by capitalisation of General reserve by the Company on
13 September 2010. 101,183,510 equity shares were allotted as fully paid up pursuant to the scheme of arrangement for
demerger of erstwhile Bajaj Auto Ltd. (now Bajaj Holdings & Investment Ltd.) by the Company on 3 April 2008.
1,805,071 equity shares thereof (excluding 1,805,071 equity shares allotted as bonus shares thereon) are deemed to be
issued by way of Euro Equity Issue represented by Global Depository Receipts (GDR) evidencing Global Depository Shares
outstanding on the record date. Outstanding GDRs at the close of the year were 66,196 (169,088)
b. Terms/rights attached to equity shares
The Company has only one class of equity shares having a par value of ` 10 per share. Each holder of equity shares is
entitled to one vote per share. The dividend proposed by the Board of Directors and approved by the shareholders in the
annual general meeting is paid in Indian rupees. In the event of liquidation of the Company, the holders of equity shares will
be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be
in proportion to the number of equity shares held by the shareholders.
c.
% Holding
31 March 2012
Nos.
% Holding
91,119,000
31.49%
91,119,000
31.49%
25,949,400
8.97%
25,949,400
8.97%
85
Notes to financial statements for the year ended 31 March 2013 (Contd.)
3 Reserves and surplus
(` In Crore)
2013
2012
General reserve
Balance as per the last financial statements
2,385.60
2,084.60
305.00
301.00
2,690.60
2,385.60
1.72
(339.04)
3,705.14
2,515.48
3,043.57
3,004.05
305.00
301.00
1,302.15
1,302.15
221.30
211.24
Total appropriations
1,828.45
1,814.39
4,920.26
3,705.14
7,612.58
5,751.70
Less:
Appropriations
Transfer to General reserve
Proposed dividend
Tax on proposed dividend
86
Notes to financial statements for the year ended 31 March 2013 (Contd.)
4 Long-term borrowings
(` In Crore)
Non-current portion
2013
Current maturities
2012
2013
2012
Unsecured
Sales tax deferral liability/loan, an incentive under Package Scheme of
Incentives 1983, 1988 and 1993 - interest free, partially prepaid
Amount disclosed under the head other current liabilities [See note 8]
71.27
97.48
17.17
27.55
71.27
97.48
17.17
27.55
(17.17)
(27.55)
71.27
97.48
Terms of repayment:
Sales tax deferral liability/loan is repayable, free of interest, over predefined equal annual instalments (5/6/7) after the expiry of a specified period (10/12/18 years) from
the initial date of deferrment of liability, as per respective schemes of incentive.
Repayment schedule
Repayable to IDBI
May 12
27.55
May 13
17.17
17.17
May 14
1.45
1.45
May 15
0.58
0.58
11.18
May 31
9.89
11.18
May 32
9.89
11.18
May 33
9.89
11.18
May 34
9.89
11.18
May 35
9.89
11.19
May 36
9.89
11.19
May 37
9.90
71.27
97.48
17.17
27.55
87
Notes to financial statements for the year ended 31 March 2013 (Contd.)
5 Deferred tax liabilities (net)
(` In Crore)
2013
2012
259.39
201.10
12.26
5.24
271.65
206.34
43.13
58.37
28.51
27.92
1.84
2.15
20.08
16.76
12.40
11.88
6.31
5.08
43.88
34.82
0.40
0.92
156.55
157.90
115.10
48.44
88
2012
117.94
148.87
4.12
8.20
122.06
157.07
Notes to financial statements for the year ended 31 March 2013 (Contd.)
7 Provisions
(` In Crore)
Long-term
2013
Short-term
2012
2013
2012
129.09
107.31
47.51
40.09
5.52
4.54
0.37
0.34
134.61
111.85
47.88
40.43
32.52
31.20
Other provisions
Provision for warranties
Provision for tax (net of tax paid in advance)
4.01
12.05
Proposed dividend*
1,302.15
1,302.15
221.30
211.24
468.98
1,559.98
2,025.62
134.61
111.85
1,607.86
2,066.05
2012
31.20
39.02
21.78
29.24
16.14
34.29
4.32
2.77
32.52
31.20
Current portion
32.52
31.20
Non-current portion
* Dividend per equity share proposed and recognised as distribution to equity shareholders, for the year ended 31 March 2013 and 2012 amounts to ` 45 for both the years.
89
Notes to financial statements for the year ended 31 March 2013 (Contd.)
8 Current liabilities
(` In Crore)
Current
2013
2012
Trade payables
Dues to micro and small enterprises*
11.60
11.10
1,968.01
1,946.69
1,979.61
1,957.79
17.17
27.55
32.30
32.89
200.91
279.00
0.01
14.24
9.51
8.57
6.08
21.84
19.47
30.73
26.95
64.52
62.43
155.88
140.44
546.16
604.33
2,525.77
2,562.12
Other payables
* Considering the Company has been extended credit period upto 45 days by its vendors and payments being released on a timely basis, there is no liability towards
interest on delayed payments under The Micro, Small and Medium Enterprises Development Act, 2006 during the year. There is also no amount of outstanding interest
in this regard, brought forward from previous years. The above information is on basis of intimation received, on requests made by the Company, with regards to vendors
registration under the said Act.
90
Notes to financial statements for the year ended 31 March 2012 (Contd.)
9 Fixed assets (tangible and intangible assets)
(` In Crore)
Gross block (a)
As at
31 Mar 12
Additions
Depreciation
Deductions/
adjustments
As at
31 Mar 13
As at
31 Mar 12
Deductions/
adjustments
Net block
For the
year (d)
As at
31 Mar 13
As at
31 Mar 13
As at
31 Mar 12
Tangible assets
Land freehold
28.00
7.73
20.27
20.27
Land leasehold
56.97
0.66
56.31
56.31
56.97
584.79
92.13
1.98
674.94
144.50
1.80
14.06
156.76
518.18
440.29
28.00
13.23
13.23
6.37
0.47
6.84
6.39
6.86
1,526.54
67.37
52.35
1,541.56
1,182.02
47.92
46.79
1,180.89
360.67
344.52
97.63
435.19
30.71
0.49
465.41
337.56
0.01
24.21
361.76
103.65
Electric installations
67.95
5.39
0.66
72.68
33.42
0.40
2.49
35.51
37.17
34.53
Factory equipments
248.96
27.29
0.48
275.77
108.32
0.47
11.57
119.42
156.35
140.64
Furniture
23.34
2.76
0.18
25.92
10.26
0.05
1.62
11.83
14.09
13.08
Office equipment
28.24
11.84
0.50
39.58
10.49
0.14
1.47
11.82
27.76
17.75
Electric fittings
21.36
1.28
0.09
22.55
8.28
0.01
0.83
9.10
13.45
13.08
359.35
269.30
8.02
620.63
73.11
1.74
59.12
130.49
490.14
286.24
1,479.59
3,393.92
508.07
73.14
3,828.85
1,914.33
52.54
162.63
2,024.42
1,804.43
3,390.88
167.07
164.03
3,393.92
1,912.45
142.57
144.45
1,914.33
1,479.59
Intangible assets
Technical know-how
Previous year total
(a)
(b)
(c)
(d)
(e)
2.14
2.14
4.28
2.14
2.14
2.14
2.14
At cost, except leasehold land and technical know-how which is at cost, less amounts written off.
Includes premises on ownership basis in Co-operative Society ` 9.06 crore and cost of shares therein ` 2,000/Includes premises purchased, pending registration amounting to ` 15.3 crore.
Refer note 1 clause 3(A) and (B) of summary of significant accounting policies.
Depreciation for the year on investment property amounting to ` 1.34 crore (previous year ` 1.17 crore) has been reduced from Investments in note 10.
91
Notes to financial statements for the year ended 31 March 2013 (Contd.)
10 Investments
(` In Crore)
Non-current portion
2013
Current maturities
2012
2013
2012
64.79
64.79
3.09
2.51
1.17
65.37
63.62
4.71
4.71
0.47
0.47
5.18
5.18
0.08
0.07
5.10
5.11
0.01
0.01
1,218.72
986.86
137.82
137.82
137.79
102.27
0.03
35.55
1,218.75
1,022.41
0.57
1,289.23
1,091.72
Unquoted:
6 Years National Saving Certificates of the face
value of ` 98,500
In Fully Paid Equity Shares:
Trade:
In Subsidiary Company:
Unquoted:
1,980,000
291,875
Others:
Unquoted:
(565,000)Shares of ` 10 each in
Durovalves India Pvt. Ltd.
Carried over
92
Notes to financial statements for the year ended 31 March 2013 (Contd.)
10 Investments (Contd.)
(` In Crore)
Non-current portion
2013
Brought over
Current maturities
2012
2013
2012
1,289.23
1,091.72
25.00
25.00
15.65
15.65
36.59
36.59
36.77
36.77
129.68
129.68
9.00
52.01
52.01
10.33
71.54
10.28
20.56
20.56
10.53
Carried over
113.78
335.59
202.48
92.35
Carried over
1,289.23
1,091.72
In Debentures:
Fully paid:
Others:
Quoted:
93
Notes to financial statements for the year ended 31 March 2013 (Contd.)
10 Investments (Contd.)
(` In Crore)
Non-current portion
2013
Current maturities
2012
2013
2012
Brought over
1,289.23
1,091.72
Brought over
113.78
335.59
202.48
92.35
26.95
5.36
In Debentures: (Contd.)
Fully paid: (Contd.)
Others: (Contd.)
Quoted: (Contd.)
10.19
56.24
56.24
10.00
10.00
16.50
40.92
40.92
45.71
45.71
15.58
10.54
10.54
5.29
5.29
8.61
8.61
5.25
5.25
Carried over
134.86
534.65
363.96
150.43
Carried over
1,289.23
1,091.72
94
Notes to financial statements for the year ended 31 March 2013 (Contd.)
10 Investments (Contd.)
(` In Crore)
Non-current portion
2013
Current maturities
2012
2013
2012
Brought over
1,289.23
1,091.72
Brought over
134.86
534.65
363.96
150.43
39.90
39.90
134.86
574.55
403.86
150.43
In Debentures: (Contd.)
Fully paid: (Contd.)
Others: (Contd.)
Quoted: (Contd.)
1.70
6.89
15.49
1.90
133.16
567.66
388.37
148.53
51.32
36.22
15.77
15.77
21.63
21.63
81.16
81.16
109.16
109.16
82.69
In Bonds:
Fully paid:
Others:
Quoted:
49.18
20.97
20.97
105.17
105.17
Carried over
118.56
405.18
235.30
168.09
Carried over
1,422.39
1,659.38
388.37
148.53
95
Notes to financial statements for the year ended 31 March 2013 (Contd.)
10 Investments (Contd.)
(` In Crore)
Non-current portion
2013
Current maturities
2012
2013
2012
Brought over
1,422.39
1,659.38
388.37
148.53
Brought over
118.56
405.18
235.30
168.09
1.68
1.68
1.72
10.00
30.00
30.00
13.47
13.47
117.19
117.19
30.25
30.25
4.70
In Bonds: (Contd.)
Fully paid: (Contd.)
Others: (Contd.)
Quoted: (Contd.)
5.00
5.00
128.61
128.61
16.49
16.49
27.49
Carried over
213.77
752.57
482.78
207.30
Carried over
1,422.39
1,659.38
388.37
148.53
96
Notes to financial statements for the year ended 31 March 2013 (Contd.)
10 Investments (Contd.)
(` In Crore)
Non-current portion
2013
Current maturities
2012
2013
2012
Brought over
1,422.39
1,659.38
388.37
148.53
Brought over
213.77
752.57
482.78
207.30
11.23
16.47
16.47
333.88
333.88
52.68
52.68
15.86
15.86
37.79
16.27
10.61
10.61
51.70
51.70
99.79
99.79
12.29
12.29
Carried over
790.58
1,362.12
499.25
256.32
Carried over
1,422.39
1,659.38
388.37
148.53
In Bonds: (Contd.)
Fully paid: (Contd.)
Others: (Contd.)
Quoted: (Contd.)
97
Notes to financial statements for the year ended 31 March 2013 (Contd.)
10 Investments (Contd.)
(` In Crore)
Non-current portion
2013
2012
Current maturities
2013
2012
Brought over
1,422.39
1,659.38
388.37
148.53
Brought over
790.58
1,362.12
499.25
256.32
In Bonds: (Contd.)
Fully paid: (Contd.)
Others: (Contd.)
Quoted: (Contd.)
10.23
10.23
21.53
5.14
63.36
63.36
10.44
10.44
52.52
52.52
21.07
21.07
37.12
37.12
31.55
31.55
41.32
41.32
Carried over
1,026.64
1,656.40
530.80
256.32
Carried over
1,422.39
1,659.38
388.37
148.53
98
Notes to financial statements for the year ended 31 March 2013 (Contd.)
10 Investments (Contd.)
(` In Crore)
Non-current portion
2013
Current maturities
2012
2013
2012
Brought over
1,422.39
1,659.38
388.37
148.53
Brought over
1,026.64
1,656.40
530.80
256.32
16.07
32.12
32.12
10.12
10.12
5.21
5.21
5.47
5.47
5.47
5.47
5.52
5.52
10.79
10.79
5.23
5.23
16.04
16.04
67.85
67.85
Carried over
1,142.34
1,820.22
578.92
272.39
Carried over
1,422.39
1,659.38
388.37
148.53
In Bonds: (Contd.)
Fully paid: (Contd.)
Others: (Contd.)
Quoted: (Contd.)
50,020
99
Notes to financial statements for the year ended 31 March 2013 (Contd.)
10 Investments (Contd.)
(` In Crore)
Non-current portion
2013
Current maturities
2012
2013
2012
Brought over
1,422.39
1,659.38
388.37
148.53
Brought over
1,142.34
1,820.22
578.92
272.39
In Bonds: (Contd.)
Fully paid: (Contd.)
Others: (Contd.)
Quoted: (Contd.)
11.02
11.02
93.54
53.51
26.11
26.11
11.08
11.08
68.88
68.88
10.54
45.91
45.91
1,179.47
2,047.27
704.79
365.93
5.71
25.44
32.58
12.64
1,173.76
2,021.83
672.21
353.29
25.00
25.00
20.00
20.00
Carried over
45.00
45.00
Carried over
2,596.15
3,681.21
1,060.58
501.82
100
Notes to financial statements for the year ended 31 March 2013 (Contd.)
10 Investments (Contd.)
(` In Crore)
Non-current portion
2013
Current maturities
2012
2013
2012
Brought over
2,596.15
3,681.21
1,060.58
501.82
Brought over
45.00
45.00
10.00
10.00
20.00
20.00
15,000,000
15.00
15.00
14,999,990
15.00
15.00
10,000,000
20,000,000
100,000,000
100.00
25,000,000
25.00
25.00
25.00
25,000,000
25.00
25,000,000
25.00
25,000,000
25.00
20.00
25.00
20,000,000
20.00
50,000,000
50.00
40.00
100.00
50,000,000
50.00
25,000,000
25.00
25,000,000
25.00
Carried over
605.00
105.00
105.00
Carried over
2,596.15
3,681.21
1,060.58
501.82
25,000,000
25,000,000
20,000,000
25,000,000
40,000,000
100,000,000
101
Notes to financial statements for the year ended 31 March 2013 (Contd.)
10 Investments (Contd.)
(` In Crore)
Non-current portion
2013
Current maturities
2012
2013
2012
Brought over
2,596.15
3,681.21
1,060.58
501.82
Brought over
605.00
105.00
105.00
50.00
15,000,000
15.00
30,000,000
30.00
25.00
20.00
25.00
25.00
50.00
25.00
20,000,000
20.00
25,000,000
25.00
25.00
20.00
5.00
25.00
50.00
25.00
8.00
50.00
1,123.00
105.00
105.00
3,719.15
3,786.21
1,165.58
501.82
50,000,000
25,000,000
20,000,000
25,000,000
25,000,000
50,000,000
25,000,000
25,000,000
20,000,000
5,000,000
25,000,000
50,000,000
25,000,000
8,000,000
50,000,000
Total (A)
102
Notes to financial statements for the year ended 31 March 2013 (Contd.)
10 Investments (Contd.)
(` In Crore)
Non-current portion
2013
Current maturities
2012
2013
2012
47.10
23.50
46.82
117.42
4.74
122.16
23.59
48.70
23.95
48.14
23.96
48.20
24.21
23.91
23.89
23.85
24.32
47.44
23.20
23.15
68.71
Carried over
499.22
Carried over
122.16
In Certificate of Deposit:
Unquoted:
103
Notes to financial statements for the year ended 31 March 2013 (Contd.)
10 Investments (Contd.)
(` In Crore)
Non-current portion
2013
Current maturities
2012
2013
2012
Brought over
122.16
Brought over
499.22
22.84
22.58
47.28
47.42
95.54
23.97
47.94
23.46
47.04
47.14
46.86
46.51
96.05
46.32
46.04
46.22
46.95
45.96
138.32
46.63
70.59
Carried over
1,056.24
544.64
Carried over
122.16
10,000
10,000
15,000
104
Notes to financial statements for the year ended 31 March 2013 (Contd.)
10 Investments (Contd.)
(` In Crore)
Non-current portion
2013
Current maturities
2012
2013
2012
Brought over
122.16
Brought over
1,056.24
544.64
23.43
45.77
45.74
45.79
68.60
45.76
45.95
1,377.28
544.64
31.31
16.14
1,408.59
560.78
34.00
15.00
15.00
34.00
1,545.75
594.78
3,719.15
3,786.21
2,711.33
1,096.60
139.79
110.59
1.49
0.09
Unquoted:
(1,980,225.117)Birla Sun Life Cash PlusInstitutional Premium - Growth
799,068.818
Total (B)
Total (A+B)
` In Crore
Book Value as at
Market Value as at
31 March
2013
31 March
2012
31 March
2013
31 March
2012
2,351.82
2,999.50
Quoted*
2,372.60
3,096.42
Unquoted
4,057.88
1,786.39
Total
6,430.48
4,882.81
Notes to Investments
1 National Saving Certificate of face value of ` 8,500 deposited with Government Departments.
2 * Quoted Investments for which quotations are not available have been included in market value at the face value/paid up value, whichever is lower, except in case of
Debentures, Bonds and Government securities, where the Net Present Value at current yield to maturity have been considered
3 Investments made by the Company other than those with a maturity of less than one year, are intended to be held for long term, hence diminution in the value of
quoted investments are not considered to be of a permanent nature. On an assessment of the non-performing investments (quoted and unquoted) as per the guidelines
adopted by the management, a provision of ` 35.52 crore has been determined during the year ended 31 March 2013.
4 Refer note 1 clause 5 for accounting policy and valuation principles for investments.
105
Notes to financial statements for the year ended 31 March 2013 (Contd.)
11 Loans and advances
(Unsecured, good, unless stated otherwise)
(` In Crore)
Long-term
2013
Short-term
2012
2013
2012
Capital advances
119.97
331.38
Security deposits
26.01
28.69
5.86
3.73
47.66
46.43
65.72
71.08
3.71
3.47
51.37
49.90
65.72
71.08
3.71
3.47
47.66
46.43
65.72
71.08
17.96
17.96
1,102.04
805.91
92.11
106.52
229.26
153.90
3.44
3.44
11.31
21.53
19.07
42.55
26.30
268.75
194.37
1,240.14
950.04
462.39
600.87
1,311.72
1,024.85
Security deposits include a sum of ` 9.92 crore (previous year ` 9.2 crore) against use of premises on a Leave License basis, placed with directors and their relatives,
jointly and severally.
12 Trade receivables
(Unsecured, considered good, unless stated otherwise)
(` In Crore)
Non-current
2013
Current
2012
2013
2012
0.41
Doubtful
1.70
3.16
1.70
3.57
1.70
3.16
0.41
767.58
422.79
0.41
767.58
422.79
(0.41)
767.58
422.79
Others, Good
106
Notes to financial statements for the year ended 31 March 2013 (Contd.)
13 Other assets
(Unsecured, good, unless stated otherwise)
(` In Crore)
Non-current
2013
Current
2012
2013
2012
0.41
1.02
1.02
1.02
1.43
Others
Interest receivable on investments (Previous year ` 5,247 - current)
13.52
0.34
3.85
182.50
291.74
5.90
9.46
5.90
9.46
182.50
291.74
5.90
9.46
182.50
291.74
15.96
212.32
295.59
1.02
1.43
212.32
295.59
14 Inventories*
(` In Crore)
2013
Raw materials and components (includes in transit ` 21.42 crore (previous year: ` 15.49 crore))
Work-in-progress
2012
196.77
223.11
26.56
26.67
248.89
273.71
1.51
12.72
17.26
124.26
120.30
17.97
11.93
7.60
5.55
636.28
678.53
Finished goods
Vehicles (manufactured)
Vehicles (traded)
Auto spare parts (manufactured)
Auto spare parts (traded)
Stores, spares and packing material
Loose tools
107
Notes to financial statements for the year ended 31 March 2013 (Contd.)
14 Inventories (Contd.)
Details of inventory
(` In Crore)
2013
2012
4.27
6.05
1.21
1.46
169.02
190.57
19.87
22.50
2.40
2.53
196.77
223.11
0.75
26.56
25.92
26.56
26.67
248.89
273.71
1.51
Work-in-progress
Vehicles
Factory made components
Finished goods
Vehicles (manufactured)
Vehicles (traded)
Auto spare parts (manufactured)
Auto spare parts (traded)
12.72
17.26
124.26
120.30
387.38
411.27
Current
2012
2013
2012
451.73
439.31
0.13
0.08
98.42
733.36
550.28
1,172.75
8.57
6.08
475.00
0.02
0.02
1.00
1.00
1.02
1.02
8.57
481.08
(1.02)
(1.02)
558.85
1,653.83
Cash on hand
Cash equivalents
Certificate of Deposits with maturity of less than three months
from date of acquisition
108
Notes to financial statements for the year ended 31 March 2013 (Contd.)
16 Revenue from operations
(` In Crore)
2013
2012
20,617.87
19,827.03
1,128.91
946.76
19,488.96
18,880.27
53.86
57.09
416.75
564.24
36.85
27.08
0.83
0.30
508.29
648.71
19,997.25
19,528.98
2012
Sale of products
Vehicles (manufactured)
Vehicles (traded)
Auto spare parts (manufactured)
Auto spare parts (traded)
18,923.74
18,427.16
1.30
213.61
193.00
1,479.22
1,206.87
20,617.87
19,827.03
109
Notes to financial statements for the year ended 31 March 2013 (Contd.)
17 Other income
(` In Crore)
2013
2012
Investment income:
Interest income on
Bank deposits
Long-term investments
41.72
42.76
259.07
275.56
(49.82)
(34.78)
73.41
16.14
324.38
299.68
0.15
0.14
48.23
33.09
372.76
332.91
51.29
24.91
9.91
3.44
Dividend income on
Long-term investments
Others:
Interest - others
Rent
Insurance claims
0.90
0.90
34.32
27.56
7.17
9.65
1.15
0.57
5.15
1.86
Less: Write backs on account of amounts writen off during the year, as per contra
4.57
1.60
0.58
0.26
Miscellaneous receipts
69.12
46.03
131.92
47.42
161.81
68.95
422.73
275.13
795.49
608.04
Ferrous metal
Non-ferrous metal
Components
Tyres and tubes
Others
110
2012
102.36
108.31
0.51
0.68
12,700.73
12,600.95
657.48
673.24
62.66
62.36
13,523.74
13,445.54
Notes to financial statements for the year ended 31 March 2013 (Contd.)
19 Purchase of traded goods
(` In Crore)
2013
Vehicles
Auto spare parts
2012
2.79
856.04
751.15
858.83
751.15
20 (Increase)/decrease in inventories
(` In Crore)
2012
(Increase)/
decrease
26.56
26.67
0.11
248.89
273.71
24.82
2013
1.51
(1.51)
12.72
17.26
4.54
124.26
120.30
(3.96)
413.94
437.94
24.00
26.67
26.20
(0.47)
273.71
230.27
(43.44)
17.26
10.42
(6.84)
120.30
76.90
(43.40)
437.94
343.79
(94.15)
24.00
(94.15)
2012
493.16
423.87
27.72
24.72
68.79
49.50
49.81
42.02
639.48
540.11
111
Notes to financial statements for the year ended 31 March 2013 (Contd.)
22 Finance costs
(` In Crore)
Interest expense
2013
2012
0.54
22.24
0.54
22.24
23 Other expenses
(` In Crore)
2013
2012
123.85
110.25
121.33
101.85
6.27
12.33
8.84
10.74
Repairs to buildings
30.56
23.86
Repairs to machinery
95.57
73.76
Other repairs
4.51
5.07
Insurance
3.46
2.68
6.31
3.42
Payment to auditor
1.14
1.20
0.31
0.24
1.05
0.93
37.49
26.12
156.85
174.36
69.22
16.75
12.55
255.41
273.30
50.44
50.44
201.95
160.31
80.79
88.77
35.82
28.25
20.51
18.98
Donations
0.01
10.00
4.65
1.70
4.57
1.60
0.08
0.10
7.04
7.49
4.92
9.95
2.14
2.14
0.66
0.65
35.52
Less:
112
6.03
1,378.80
1,215.77
Notes to financial statements for the year ended 31 March 2013 (Contd.)
23 Other expenses (Contd.)
Payment to auditor
(` In Crore)
2013
2012
Audit fee
0.80
0.80
0.06
0.09
Limited review
0.12
0.10
0.10
0.15
0.06
0.06
1.14
1.20
As auditor:
In other capacity:
Other services (certification fees)
Reimbursement of expenses
24 Exceptional item
(` In Crore)
2013
2012
(134.00)
(134.00)
113
Notes to financial statements for the year ended 31 March 2013 (Contd.)
MTM
Gain/(Loss)
(` In Crore)
As at 31 March 2012
Notional
In USD Mn
(Sell)
MTM
Gain/(Loss)
(` In Crore)
On Export Transactions
Not later than 3 months (April 13 to June 13)
336
11.50
330
(83.76)
Later than three months and not later than six months
(July 13 to Sept 13)
256
5.10
365
(109.81)
Later than six month and not later than one year
(Oct 13 to March 14)
312
(0.64)
717
(275.41)
904
15.96
1,412
(468.98)
Total
On Import Transactions: ` Nil
114
Notes to financial statements for the year ended 31 March 2013 (Contd.)
25 Derivative hedging instruments (Contd.)
The fair values (Marked-to-market) of foreign currency derivative contracts outstanding as on 31 March 2013 and
31 March 2012 are as follows:
As at 31 March 2013
In USD
Mn (Sell)
As at 31 March 2012
MTM
Gain/(Loss)
(` In Crore)
In USD
Mn (Sell)
MTM
Gain/(Loss)
(` In Crore)
408
(212.87)
904
15.96
1,004
(256.11)
904
15.96
1,412
(468.98)
2012
(216.93)
20.77
76.28
269.40
276.89
31.70
Closing balance
(16.32)
(216.93)
In respect of foreign currency derivative contracts designated as cash flow hedges for Range forward contracts, the Company has
recorded a net gain of ` 18.04 crore and net loss of ` 122.11 crore, as a component of equity (Hedge reserve) as at
31 March 2013, and 2012, respectively a net loss of ` 394.74 crore and a net loss of ` 56.24 crore as part of revenue during
the year ended 31 March 2013, and 2012 respectively.
(` In Crore)
2013
2012
(122.11)
254.59
178.35
394.74
56.24
18.04
(122.11)
Closing balance
115
Notes to financial statements for the year ended 31 March 2013 (Contd.)
25 Derivative hedging instruments (Contd.)
Amount that was removed from appropriate equity account (Hedge reserve account) during the year ended 2013 and 2012 in
respect of forecast transaction for which hedge accounting had previously been used, but which is no longer expected to occur is
` 69.22 crore and ` Nil respectively.
Amount that was removed from appropriate equity account (Hedge reserve account) during the period and included in the initial
cost or other carrying amount of a non-financial asset or non-financial liability whose acquisition or incurrence was a hedged
highly probable forecast transaction is ` Nil.
Amount in respect of the ineffectiveness which relates to time value of option contracts recognised in the Statement of Profit
and Loss that arises from cash flow hedges is ` 2.08 crore as on 31 March 2013.
In respect of the Companys foreign currency derivative contracts outstanding as on 31 March 2013, a 10% increase in the
exchange rates of the currency underlying such contracts as given by the banks would have resulted in an approximately
` 185.07 crore decrease in the fair value of outstanding contracts.
In respect of the Companys foreign currency derivative contracts outstanding as on 31 March 2013, a 10% decrease in the
exchange rates of the currency underlying such contracts as given by the banks would have resulted in an approximately
` 320.86 crore increase in the fair value of outstanding contracts.
Counter-party Risk
Counter-party risk encompasses settlement risk on foreign currency derivative contracts. Exposure to these risks is closely
monitored and kept within predetermined parameters. The Company does not expect any losses from non-performance by these
counter-parties.
The Companys policy is to transact with credit worthy banks, which are reviewed on an on-going basis. The following table
depicts that the majority of the foreign currency derivatives are placed in highly rated banks:
(USD Million)
As at
31 March 2013
Investment grade of outstanding foreign exchange forward contracts
Highest safety
904
High safety
Adequate safety
Total
904
Highest safety represents a credit rating equivalent of AAA and A1+, High safety represents a credit rating equivalent of AA+,
AA and adequate safety represents a credit rating of A.
Open foreign exchange exposures outstanding at close of the year:
(USD Million)
As at
As at
31 March 2013 31 March 2012
Receivables
Payables
Others
116
41
41
53
57
Notes to financial statements for the year ended 31 March 2013 (Contd.)
26 Earnings Per Share (EPS)
Earnings per share is calculated by dividing the profit attributable to the equity shareholders by the weighted average number
of equity shares outstanding during the year. The numbers used in calculating basic and diluted earnings are stated below:
As at
31 March 2013
As at
31 March 2012
3,043.57
3,004.05
289,367,020
289,367,020
105.2
103.8
10.0
10.0
27 Contingent liabilities
(` In Crore)
As at
31 March 2013
As at
31 March 2012
418.88
418.74
27.14
25.44
0.04
0.12
293.31
181.78
54.13
9.58
377.48
357.85
Liability
unascertained
Liability
unascertained
2012
82.01
275.87
176.29
82.01
452.16
c) Other commitments
The Company has imported Capital Goods under the Export Promotion Capital Goods Scheme, of the Government of India,
at concessional rates of duty on an undertaking to fulfill quantified exports, which have been entirely fulfilled by the close of
the year. However, formal discharge from obligation by discharge of license by appropriate authorities is in progress.
117
Notes to financial statements for the year ended 31 March 2013 (Contd.)
29 Value of imports calculated on CIF basis
(` In Crore)
2013
Raw materials
Components
Vehicles and spare parts
Machinery spares
Capital goods (including aircraft ` 209.66 crore, previous year - ` Nil)
Tools, stores, etc.
2012
38.17
115.70
547.85
521.68
11.78
9.60
6.89
9.20
378.37
21.70
6.46
6.83
989.52
684.71
182
135
2012
Travelling expenses
6.81
5.06
4.47
3.40
3.04
5.31
0.16
5.75
0.84
Consultancy charges
2.02
1.20
39.45
43.72
Other matters
32.10
32.58
93.64
92.27
Interest
31 Imported and indigenous raw materials, components and spare parts consumed
2013
(` In Crore)
2012
Percentage
(` In Crore)
Percentage
628.53
4.65%
592.10
4.40%
12,895.21
95.35%
12,853.44
95.60%
13,523.74
100.00%
13,445.54
100.00%
11.73
1.37%
11.41
1.63%
844.89
98.63%
689.50
98.37%
856.62
100.00%
700.91
100.00%
118
Notes to financial statements for the year ended 31 March 2013 (Contd.)
32 Earnings in foreign currency (accrual basis)
(` In Crore)
2013
F.O.B.Value of exports*
(USD 1,309 million; previous year: USD 1,369 million)
2012
6,508.27
6,449.18
39.91
154.79
8.67
12.98
Interest
2.66
1.95
Royalty
2.66
0.80
0.83
0.30
0.07
Asset disposal
Others
2.34
5.89
6,565.34
6,625.96
* Excludes F.O.B. Value of rupee exports to Nepal ` 204.25 crore (previous year - ` 0.34 crore)
119
Notes to financial statements for the year ended 31 March 2013 (Contd.)
33 Employee benefits
Liability for employee benefits has been determined by an actuary, appointed for the purpose, in conformity with the principles
set out in the accounting standard 15 (Revised) the details of which are as hereunder.
Funded schemes
(` In Crore)
2013
Gratuity
2012
Gratuity
219.10
181.26
(90.01)
(73.95)
Net liability
129.09
107.31
129.09
107.31
129.09
107.31
8.64
8.30
15.47
13.23
(5.21)
(4.38)
18.82
4.98
37.72
22.13
6.78
5.65
181.26
160.23
8.64
8.30
Interest cost
15.48
13.22
Actuarial losses/(gain)
20.39
6.25
Benefits paid
(6.67)
(6.74)
219.10
181.26
Net liability
73.95
61.40
5.21
4.38
Actuarial gain/(losses)
1.57
1.26
15.95
13.65
Contributions by employer
Benefits paid
(6.67)
(6.74)
90.01
73.95
(` In Crore)
2013
2013
2012
Asset information
Insurer managed funds
120
90.01
100.00%
100.00%
Notes to financial statements for the year ended 31 March 2013 (Contd.)
33 Employee benefits (Contd.)
(` In Crore)
2009
2010
2011
2012
2013
95.92
122.44
160.23
181.26
219.10
Plan assets
28.13
37.40
61.40
73.95
90.01
(67.79)
(85.04)
(98.83)
(107.31)
(129.09)
6.52
3.30
26.09
11.96
9.32
(2.75)
0.63
1.03
1.26
1.57
2013
2012
Experience adjustments
Surplus/(deficit)
Exp. adj. on plan liabilities
Exp. adj. on plan assets
8.05%
8.65%
7.50%
7.50%
8.00%
8.00%
9.00%
9.00%
(` In Crore)
2013
Provident
Fund
2012
Provident
Fund
483.55
408.98
(483.55)
(408.98)
Liability
Assets
19.57
36.19
(37.01)
Net liability
0.82
19.57
39.74
121
Notes to financial statements for the year ended 31 March 2013 (Contd.)
33 Employee benefits (Contd.)
(` In Crore)
2013
Provident
Fund
2012
Provident
Fund
408.98
19.57
Interest cost
36.19
Actuarial losses/(gain)
3.55
35.70
Benefits paid
(20.44)
483.55
408.98
408.98
Employee contributions
37.01
2.73
19.57
35.70
Benefits paid
(20.44)
483.55
408.98
2013
(` In Crore)
2013
2012
Asset information
Category of assets (% allocation)
Government of India securities
220.67
46.00%
46.00%
Corporate bonds
177.86
37.00%
37.00%
59.57
12.00%
12.00%
Others
25.45
5.00%
5.00%
483.55
100.00%
100.00%
Total
(` In Crore)
2009
2010
2011
2012
2013
408.98
483.55
Plan assets
408.98
483.55
Surplus/(deficit)
3.55
2.73
Experience adjustments
122
Notes to financial statements for the year ended 31 March 2013 (Contd.)
33 Employee benefits (Contd.)
2013
2012
8.05%
8.65%
8.56%
8.68%
Discount rate for the remaining term to maturity of the investment (p.a.)
8.05%
8.55%
8.56%
8.58%
8.50%
8.25%
Unfunded schemes
(` In Crore)
2013
Compensated
Absences
2012
Welfare
Scheme
Compensated
Absences
Welfare
Scheme
47.51
5.89
40.09
4.88
13.09
1.34
8.06
0.30
8.05%
8.05%
8.65%
8.65%
8.00%
8.00%
9.00%
9.00%
123
Notes to financial statements for the year ended 31 March 2013 (Contd.)
34 Segment information
Segment information is based on the Consolidated financial statements.
Segment wise revenue, results and capital employed for the year ended 31 March 2013
(` In Crore)
Investments
Consolidated
20,466.36
372.76
20,839.12
20,466.36
372.76
20,839.12
3,990.31
371.92
4,362.23
1.19
1.19
1,217.16
Revenue
External sales and other income
Inter segment sales and other income
Total revenue
Segment result
Interest expense
Tax expense
Deferred tax assets write-off
11.36
Minority interest
(0.17)
3,989.12
371.92
3,132.69
Segment assets
7,089.15
5,323.67
12,412.82
229.50
Total assets
7,089.15
5,323.67
12,642.32
Segment liabilities
2,896.60
2,896.60
1,527.46
Total liabilities
2,896.60
4,424.06
Capital employed
4,192.55
5,323.67
8,218.26
Capital expenditure
508.19
508.19
165.01
165.01
2.80
2.80
Business segments of the consolidated group have been identified as distinguishable components that are engaged in a
group of related product or services and that are subject to risks and returns different from other business segments.
Accordingly Automotive and Investments have been identified as the business segments.
Consolidated
Segment revenue
External sales and other income
14,038.39
6,800.73
20,839.12
Segment assets
11,224.10
1,418.22
12,642.32
507.93
0.26
508.19
Capital expenditure
124
Notes to financial statements for the year ended 31 March 2013 (Contd.)
34 Segment information (Contd.)
Segment information is based on the Consolidated financial statements.
Segment wise revenue, results and capital employed for the year ended 31 March 2012
(` In Crore)
Investments
Consolidated
19,868.35
332.91
20,201.26
19,868.35
332.91
20,201.26
3,764.75
326.18
4,090.93
22.79
22.79
Tax expense
1,019.66
3.22
Revenue
External sales and other income
Inter segment sales and other income
Total revenue
Segment result
Interest expense
(0.14)
Minority interest
3,741.96
326.18
3,045.40
Segment assets
5,899.26
5,072.27
10,971.53
154.86
Total assets
5,899.26
5,072.27
11,126.39
Segment liabilities
3,412.17
3,412.17
1,525.44
Total liabilities
3,412.17
4,937.61
Capital employed
2,487.09
5,072.27
6,188.78
Capital expenditure
167.62
167.62
146.73
146.73
2.79
2.79
Business segments of the consolidated group have been identified as distinguishable components that are engaged in a
group of related product or services and that are subject to risks and returns different from other business segments.
Accordingly Automotive and Investments have been identified as the business segments.
Consolidated
Segment revenue
External sales and other income
13,531.30
6,669.96
20,201.26
Segment assets
10,035.72
1,090.67
11,126.39
167.07
0.55
167.62
Capital expenditure
125
Notes to financial statements for the year ended 31 March 2013 (Contd.)
35 Disclosure of transactions with related parties as required by the Accounting Standard-18
(` In Crore)
2013
Nature of transaction
Transaction
value
2012
Outstanding
amounts
carried in the
Balance Sheet
Transaction
value
Outstanding
amounts
carried in the
Balance Sheet
137.82
137.82
36.78
33.89
79.54
24.74
Interest received
1.92
1.41
Warranty paid
0.58
0.81
8.43
7.40
231.86
1,218.72
68.14
986.86
(91.12)
(91.12)
Amsterdam, Netherlands
410.04
364.48
Dividend paid
0.30
0.87
0.66
0.16
2.55
Remuneration
5.28
4.33
Commission
6.75
(6.75)
6.75
(6.75)
0.04
0.03
0.90
0.90
Remuneration
3.26
3.22
Commission
5.13
(5.13)
5.13
(5.13)
0.03
0.03
0.88
0.88
Remuneration
6.36
4.23
Commission
8.91
(8.91)
5.94
(5.94)
1.42
1.23
0.72
2.82
2.10
0.34
Sanjiv Bajaj
Remuneration
(Non-Executive Director
w.e.f. 1 April 2012)
Sitting fees
0.01
Commission
0.06
(0.06)
0.72
(0.72)
0.08
0.07
1.80
1.80
0.03
0.03
0.88
0.88
Shekhar Bajaj
Sitting fees
0.01
0.01
Commission
0.05
(0.05)
0.05
(0.05)
0.07
0.06
1.76
1.76
Sitting fees
0.01
0.01
Commission
0.05
(0.05)
0.06
(0.06)
0.12
Services rendered
126
Notes to financial statements for the year ended 31 March 2013 (Contd.)
35 Disclosure of transactions with related parties as required by the Accounting Standard-18 (Contd.)
(` In Crore)
2013
Nature of transaction
Transaction
value
2012
Outstanding
amounts
carried in the
Balance Sheet
Transaction
value
Outstanding
amounts
carried in the
Balance Sheet
0.03
0.03
0.88
0.88
E.
Enterprises over which anyone in (c) and (d) exercises significant influence:
Bajaj Finserv Ltd.
Purchase of windpower
27.44
24.38
1.17
0.37
0.28
3.04
0.73
1.62
3.01
4.06
5.99
Service rendered
9.18
0.84
7.88
1.19
Service received
0.63
0.98
Other debits
0.03
0.04
Other credits
0.16
0.47
13.49
4.98
12.02
2.54
1.12
0.63
Services rendered
0.05
Purchase of investments
25.86
0.21
0.22
Purchase of investments
26.06
Sale of investments
48.58
0.05
0.05
Services rendered
Rent paid
Purchases
0.07
(0.08)
0.17
(0.14)
Sale of DEPB
3.34
Other debits
14.57
(0.82)
15.67
(0.39)
Services received
KTM Sportsmotorcycle AG
0.36
0.30
(0.10)
230.75
25.32
128.68
22.43
Purchase of accessories
2.19
0.05
1.15
0.74
0.92
0.51
1.02
0.81
0.04
Name of the related party and nature of the related party relationship where control exists have been disclosed irrespective of whether or not there have been transactions between the related parties.
In other cases, disclosure has been made only when there have been transactions with those parties.
Related parties as defined under clause 3 of the Accounting Standard - 18 Related Party Disclosures have been identified based on representations made by key managerial personnel and information
available with the Company.
127
Notes to financial statements for the year ended 31 March 2013 (Contd.)
36 Lease
Future minimum lease rental in respect of assets given on operating lease in the form of office premises after 1 April 2001
Minimum future lease payments as on 31 March 2013:
(` In Crore)
2013
2012
Receivable
Within one year
12.63
6.97
42.13
25.72
1.09
0.49
55.85
33.18
Taken on operating lease in the form of office premises after 1 April 2001
Minimum future lease payments as on 31 March 2013:
(` In Crore)
2013
2012
6.71
5.61
16.87
13.23
14.06
16.70
37.64
35.54
Payable
Within one year
2012
(602.42)
(87.95)
39.91
154.79
7.51
7.02
131.92
(134.00)
d) Marked to market gain/(loss) (net) on change in time value of derivative hedging instruments
i.e. Range forward contracts, disclosed as exceptional item in previous year
39 Miscellaneous
` 1 crore is equal to ` 10 million.
Amounts less than ` 50,000 have been shown at actual against respective line items statutorily required to be disclosed.
Anish P Amin
Partner
Membership Number: 40451
Pune: 16 May 2013
128
J Sridhar
Company Secretary
Rahul Bajaj
Madhur Bajaj
Rajiv Bajaj
Chairman
Vice Chairman
Managing Director
Sanjiv Bajaj
D S Mehta
Kantikumar R Podar
D J Balaji Rao
S H Khan
Suman Kirloskar
Naresh Chandra
Nanoo Pamnani
Manish Kejriwal
P Murari
Niraj Bajaj
Shekhar Bajaj
Directors
Statement pursuant to Section 212 of the Companies Act, 1956 relating to subsidiary companies
1. Name of the subsidiary
31 March 2013
31 March 2013
98.94%
100%
Nil
Nil
J Sridhar
Company Secretary
Pune: 16 May 2013
Rahul Bajaj
Madhur Bajaj
Rajiv Bajaj
Chairman
Vice Chairman
Managing Director
Sanjiv Bajaj
D S Mehta
Kantikumar R Podar
D J Balaji Rao
S H Khan
Suman Kirloskar
Naresh Chandra
Nanoo Pamnani
Manish Kejriwal
P Murari
Niraj Bajaj
Shekhar Bajaj
Directors
129
130
d
e
t
a
d
i
l
o
s
n
Co
l
a
i
c
n
a
s
n
t
Fi
n
e
m
e
t
a
t
S
131
Anish P Amin
Partner
Membership Number: 40451
Pune: 16 May 2013
133
Note No.
2013
2012
289.37
289.37
7,775.93
5,792.35
8,065.30
6,081.72
0.17
71.27
97.48
115.10
48.44
122.06
157.07
Long-term provisions
136.16
113.16
444.59
416.15
Minority interest
Non-current liabilities
Long-term borrowings
Deferred tax liabilities (net)
Current liabilities
Short-term borrowings
27.14
25.44
Trade payables
1,981.89
1,968.44
548.95
607.45
Short-term provisions
1,607.86
2,066.05
Total
4,165.84
4,667.38
12,675.73
11,165.42
1,483.29
ASSETS
Non-current assets
Fixed assets
Tangible assets
1,807.16
Intangible assets
2.14
223.29
11.77
Capital work-in-progress
Intangible assets under development
Goodwill on investments in associate of subsidiary
70.26
29.88
2,100.71
1,527.08
548.25
434.60
10
3,347.59
3,376.18
33.41
39.03
11
463.16
601.66
13
Non-current investments
Deferred tax assets (net)
1.02
1.43
6,494.14
5,979.98
1,096.60
Current assets
Current investments
10
2,711.33
Inventories
14
643.96
703.61
Trade receivables
12
734.33
401.93
15
566.51
1,659.84
11
1,313.14
1,027.87
13
Total
The accompanying notes are an integral part of the financial statements
In terms of our report of even date
For Dalal & Shah
Firm Registration Number: 102021W
Chartered Accountants
Anish P Amin
Partner
Membership Number: 40451
Pune: 16 May 2013
134
J Sridhar
Company Secretary
212.32
295.59
6,181.59
5,185.44
12,675.73
11,165.42
Rahul Bajaj
Madhur Bajaj
Rajiv Bajaj
Chairman
Vice Chairman
Managing Director
Sanjiv Bajaj
D S Mehta
Kantikumar R Podar
D J Balaji Rao
S H Khan
Suman Kirloskar
Naresh Chandra
Nanoo Pamnani
Manish Kejriwal
P Murari
Niraj Bajaj
Shekhar Bajaj
Directors
Consolidated Statement of Profit and Loss for the year ended 31 March
(` In Crore)
Note No.
Particulars
Sales
2013
20,662.36
2012
19,892.28
1,128.91
946.76
19,533.45
18,945.52
508.54
649.13
16
20,041.99
19,594.65
Other income
17
797.13
606.61
20,839.12
20,201.26
18
13,536.43
13,454.66
19
864.76
757.01
20
32.35
(85.65)
21
649.93
550.18
Finance costs
22
Depreciation
Other expenses
23
24
1.19
22.79
165.01
146.73
1,375.69
1,257.91
(62.85)
(49.43)
16,562.51
16,054.20
4,276.61
4,147.06
(134.00)
4,276.61
4,013.06
1,156.00
1,003.39
61.16
16.27
1,217.16
1,019.66
3,059.45
2,993.40
11.36
3.22
84.43
55.08
Minority interest
(0.17)
(0.14)
3,132.69
3,045.40
108.3
105.2
J Sridhar
Company Secretary
Rahul Bajaj
Madhur Bajaj
Rajiv Bajaj
Chairman
Vice Chairman
Managing Director
Sanjiv Bajaj
D S Mehta
Kantikumar R Podar
D J Balaji Rao
S H Khan
Suman Kirloskar
Naresh Chandra
Nanoo Pamnani
Manish Kejriwal
P Murari
Niraj Bajaj
Shekhar Bajaj
Directors
135
I.
2013
2012
Operating activities
Profit before tax
Add: Income from associate after tax
4,276.61
4,013.06
84.43
55.08
4,361.04
4,068.14
Adjustments:
Add:
i) Depreciation
165.01
146.73
(131.92)
134.00
2.14
2.14
0.66
0.65
7.04
7.49
4.92
9.95
1.19
22.79
49.04
323.75
Less:
i) Investment income included in above:
Interest on long-term investments
259.07
275.56
41.72
42.76
48.23
33.09
(6.03)
0.15
0.14
23.59
(18.64)
372.76
326.88
5.15
1.86
7.17
9.65
68.95
(454.03)
(338.39)
3,956.05
4,053.50
(127.36)
(62.39)
(198.69)
247.74
(8.92)
136
59.65
(330.94)
301.26
(478.90)
359.25
(20.17)
(19.20)
3,456.98
4,393.55
(1,238.68)
(1,147.28)
2,218.30
3,246.27
2,218.30
3,246.27
2013
Brought forward
2012
2,218.30
3,246.27
(1,701.13)
(329.07)
472.51
(478.17)
(508.30)
(361.43)
20.12
22.65
(40.38)
(29.88)
(1,757.18)
(1,175.90)
259.07
275.56
41.72
42.76
48.23
33.09
(6.03)
0.15
0.14
23.59
(18.64)
372.76
326.88
(10.01)
(0.76)
362.75
326.12
(1,394.43)
(849.78)
823.87
2,396.49
137
2013
2012
Brought forward
823.87
2,396.49
1.70
(131.17)
(23.53)
(1.19)
(22.79)
41.70
(31.88)
(9.34)
(10.39)
(1,299.66)
(1,154.26)
(211.24)
(187.77)
(1,478.03)
(1,561.79)
25.02
59.38
0.06
0.26
8.26
39.79
(1,444.69)
(1,462.36)
(620.82)
934.13
1,178.76
244.63
557.94
1,178.76
[Opening balance]
Cash and cash equivalents as at 31 March 2013
[Closing balance]
138
J Sridhar
Company Secretary
Rahul Bajaj
Madhur Bajaj
Rajiv Bajaj
Chairman
Vice Chairman
Managing Director
Sanjiv Bajaj
D S Mehta
Kantikumar R Podar
D J Balaji Rao
S H Khan
Suman Kirloskar
Naresh Chandra
Nanoo Pamnani
Manish Kejriwal
P Murari
Niraj Bajaj
Shekhar Bajaj
Directors
Notes to consolidated financial statements for the year ended 31 March 2013
1
a) The consolidated financial statements include results of the subsidiaries of Bajaj Auto Ltd., consolidated in accordance
with AS-21 Consolidated Financial Statements, AS-23 Accounting for Investment in Associates in Consolidated
Financial Statements.
Country of
Incorporation
% Shareholding of
Bajaj Auto Ltd.
Consolidated as
Indonesia
98.94%
Subsidiary
Netherlands
100.00%
Subsidiary
The consolidated financial statements of Bajaj Auto International Holdings BV include 47.96% interest in KTM AG
(earlier KTM PowerSports AG) as an associate.
b) These financial statements have been prepared in accordance with the generally accepted accounting principles in India
under the historical cost convention on accrual basis. These financial statements have been prepared to comply in all
material aspects with the accounting standards notified under section 211(3C) [Companies (Accounting Standards)
Rules, 2006, as amended] and the other relevant provisions of the Companies Act, 1956.
All assets and liabilities have been classified as current or non-current as per the Companys normal operating cycle
and other criteria set out in the Revised Schedule VI to the Companies Act, 1956. Based on the nature of products
and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, the
Company has ascertained its operating cycle as 12 months for the purpose of current non current classification of
assets and liabilities.
2 Share capital
(` In Crore)
2013
2012
Authorised:
300,000,000 equity shares of ` 10 each
300.00
300.00
289.37
289.37
289.37
289.37
a. Further, of the above:144,683,510 equity shares were allotted as fully paid bonus shares by capitalisation of General reserve by the Company on
13 September 2010. 101,183,510 equity shares were allotted as fully paid up pursuant to the scheme of arrangement for
demerger of erstwhile Bajaj Auto Ltd. (now Bajaj Holdings & Investment Ltd.) by the Company on 3 April 2008.
1,805,071 equity shares thereof (excluding 1,805,071 equity shares allotted as bonus shares thereon) are deemed to be
issued by way of Euro Equity Issue represented by Global Depository Receipts (GDR) evidencing Global Depository Shares
outstanding on the record date. Outstanding GDRs at the close of the year were 66,196 (169,088)
b. Terms/rights attached to equity shares
The Company has only one class of equity shares having a par value of ` 10 per share. Each holder of equity shares is
entitled to one vote per share. The dividend proposed by the Board of Directors and approved by the shareholders in the
annual general meeting is paid in Indian rupees. In the event of liquidation of the Company, the holders of equity shares will
be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be
in proportion to the number of equity shares held by the shareholders.
c.
% Holding
31 March 2012
Nos.
% Holding
91,119,000
31.49%
91,119,000
31.49%
25,949,400
8.97%
25,949,400
8.97%
139
Notes to consolidated financial statements for the year ended 31 March 2013 (Contd.)
3 Reserves and surplus
(` In Crore)
2013
2012
General reserve
Balance as per the last financial statements
2,300.76
1,918.62
8.26
39.79
394.12
342.35
2,703.14
2,300.76
Hedge reserve
1.72
(339.04)
3.62
3.56
3,705.14
2,515.48
3,132.69
3,045.40
394.12
342.35
1,302.15
1,302.15
Less:
Appropriations
Transfer to General reserve
Proposed dividend
221.30
211.24
Total appropriations
1,917.57
1,855.74
4,920.26
3,705.14
147.19
121.93
7,775.93
5,792.35
4 Long-term borrowings
(` In Crore)
Non-current portion
2013
Current maturities
2012
2013
2012
Unsecured
Sales tax deferral liability/loan, an incentive under Package Scheme of
Incentives 1983,1988 and 1993 - interest free, partially prepaid
Amount disclosed under the head other current liabilities [See note 8]
140
71.27
97.48
17.17
27.55
71.27
97.48
17.17
27.55
(17.17)
(27.55)
71.27
97.48
Notes to consolidated financial statements for the year ended 31 March 2013 (Contd.)
5 Other long-term liabilities
(` In Crore)
2013
2012
117.94
Trade payables
148.87
4.12
8.20
122.06
157.07
6 Provisions
(` In Crore)
Long-term
2013
Short-term
2012
2013
2012
130.64
108.62
47.51
40.09
5.52
4.54
0.37
0.34
136.16
113.16
47.88
40.43
32.52
31.20
4.01
12.05
Other provisions
Proposed dividend
1,302.15
1,302.15
221.30
211.24
468.98
1,559.98
2,025.62
136.16
113.16
1,607.86
2,066.05
7 Short-term borrowings
(` In Crore)
2013
2012
Other Loans
Unsecured
Short-term bank loan
27.14
25.44
27.14
25.44
141
Notes to consolidated financial statements for the year ended 31 March 2013 (Contd.)
8 Current liabilities
(` In Crore)
2013
2012
Trade payables
Dues to micro and small enterprises
11.60
11.10
1,970.29
1,957.34
1,981.89
1,968.44
17.17
27.55
32.30
32.89
200.91
279.00
0.01
15.15
10.80
8.57
6.08
21.84
19.47
30.73
26.95
64.82
62.60
157.46
142.10
Unclaimed dividend
Other Payables
548.95
607.45
2,530.84
2,575.89
Additions
Depreciation
Deductions/
adjustments
As at
31 Mar 13
As at
31 Mar 12
Deductions/
adjustments
Net block
For the
year
As at
31 Mar 13
As at
31 Mar 13
As at
31 Mar 12
Tangible assets
Land freehold
28.00
7.73
20.27
20.27
Land leasehold
56.97
0.66
56.31
56.31
56.97
584.79
92.13
1.98
674.94
144.50
1.80
14.06
156.76
518.18
440.29
Buildings
Waterpumps, reservoirs and mains
Plant and machinery
Dies and jigs
28.00
13.23
13.23
6.37
0.47
6.84
6.39
6.86
1,530.67
67.40
52.32
1,545.75
1,184.60
47.90
47.25
1,183.95
361.80
346.07
97.63
435.19
30.71
0.49
465.41
337.56
0.01
24.21
361.76
103.65
Electric installations
68.85
5.39
0.66
73.58
33.83
0.39
2.60
36.04
37.54
35.02
Factory equipments
249.89
27.29
0.47
276.71
108.79
0.47
11.69
120.01
156.70
141.10
Furniture
23.97
2.76
0.18
26.55
10.61
0.05
1.73
12.29
14.26
13.36
Office equipments
28.49
11.84
0.49
39.84
10.67
0.14
1.50
12.03
27.81
17.82
Electric fittings
21.60
1.28
0.09
22.79
8.42
0.01
0.86
9.27
13.52
13.18
360.93
269.39
8.25
622.07
73.94
1.90
59.30
131.34
490.73
286.99
1,483.29
3,402.58
508.19
73.32
3,837.45
1,919.29
52.67
163.67
2,030.29
1,807.16
3,398.42
167.62
163.46
3,402.58
1,916.05
142.32
145.56
1,919.29
1,483.29
2.14
2.14
4.28
2.14
2.14
2.14
Intangible assets
Technical know-how
Previous year total
142
2.14
Notes to consolidated financial statements for the year ended 31 March 2013 (Contd.)
10 Investments
(` In Crore)
Non-current portion
2013
In Investment property
Current maturities
2012
2013
2012
65.37
63.62
5.11
5.12
847.19
608.82
0.57
133.16
567.65
388.37
148.53
In Bonds
1,173.76
2,021.84
672.21
353.29
1,123.00
105.00
120.00
34.00
In Certificate of deposits
1,408.59
560.78
In Commercial paper
122.16
3.56
3,347.59
3,376.18
2,711.33
1,096.60
Short-term
2012
2013
2012
Capital advances
119.97
331.38
Security deposits
26.78
29.48
5.86
3.73
47.66
46.43
66.89
72.77
3.71
3.47
51.37
49.90
66.89
72.77
3.71
3.47
47.66
46.43
66.89
72.77
17.96
17.96
1,102.05
806.28
92.11
106.52
229.26
153.90
0.24
0.96
3.44
3.44
11.31
21.53
19.07
42.55
26.30
268.75
194.37
1,240.39
951.37
463.16
601.66
1,313.14
1,027.87
143
Notes to consolidated financial statements for the year ended 31 March 2013 (Contd.)
12 Trade receivables
(Unsecured, considered good, unless stated otherwise)
(` In Crore)
Non-current
2013
Current
2012
2013
2012
Others, Good
0.41
1.70
3.16
1.70
3.57
1.70
3.16
0.41
734.33
401.93
0.41
734.33
401.93
(0.41)
734.33
401.93
13 Other assets
(Unsecured, good, unless stated otherwise)
(` In Crore)
Non-current
2013
Current
2012
2013
2012
0.41
1.02
1.02
1.02
1.43
Others
Interest receivable on investments (previous year ` 5,247 - current)
13.52
0.34
3.85
182.50
291.74
144
5.90
9.46
5.90
9.46
182.50
291.74
5.90
9.46
182.50
291.74
15.96
212.32
295.59
1.02
1.43
212.32
295.59
Notes to consolidated financial statements for the year ended 31 March 2013 (Contd.)
14 Inventories
(` In Crore)
2013
Raw materials and components {includes in transit ` 21.42 crore (previous year: ` 24.79 crore)}
Work-in-progress
2012
197.02
232.41
26.56
26.67
255.20
287.76
1.51
Finished goods
Vehicles (manufactured)
Vehicles (traded)
Auto spare parts (manufactured)
Auto spare parts (traded)
Stores, spares and packing material
Loose tools
11.97
17.26
126.13
122.03
17.97
11.93
7.60
5.55
643.96
703.61
Details of inventory
(` In Crore)
2013
2012
4.27
6.05
1.21
1.46
169.27
199.87
19.87
22.50
2.40
2.53
197.02
232.41
0.75
26.56
25.92
26.56
26.67
255.20
287.76
Work-in-progress
Vehicles
Factory made components
Finished goods
Vehicles (manufactured)
Vehicles (traded)
Auto spare parts (manufactured)
Auto spare parts (traded)
1.51
11.97
17.26
126.13
122.03
394.81
427.05
145
Notes to consolidated financial statements for the year ended 31 March 2013 (Contd.)
15 Cash and bank balances
(` In Crore)
Non-current
2013
Current
2012
2013
2012
Cash on hand
459.38
445.32
0.14
0.08
Cash equivalents
Certificate of Deposits with maturity of less than three months
from date of acquisition
98.42
733.36
557.94
1,178.76
8.57
6.08
475.00
0.02
0.02
1.00
1.00
1.02
1.02
8.57
481.08
(1.02)
(1.02)
566.51
1,659.84
2012
20,662.36
19,892.28
1,128.91
946.76
19,533.45
18,945.52
54.11
57.51
416.75
564.24
36.85
27.08
0.83
0.30
508.54
649.13
20,041.99
19,594.65
2012
Sale of products
Vehicles (manufactured)
Vehicles (traded)
Auto spare parts (manufactured)
Auto spare parts (traded)
146
18,964.70
18,490.48
1.30
213.61
193.00
1,482.75
1,208.80
20,662.36
19,892.28
Notes to consolidated financial statements for the year ended 31 March 2013 (Contd.)
17 Other income
(` In Crore)
2013
2012
Investment income:
Interest income on
Bank deposits
41.72
42.76
259.07
275.56
(49.82)
(34.78)
73.41
16.14
324.38
299.68
0.15
0.14
48.23
33.09
372.76
332.91
49.37
23.50
Rent
9.91
3.44
Insurance claims
0.90
0.90
Long-term investments
Amortisation of (premium)/discount on acquisition of fixed income securities on
Long-term investments
Current investments
Dividend income on
Long-term investments
Profit on sale of investments, net*
Others:
Interest - others
Miscellaneous receipts
34.40
27.57
7.17
9.65
1.15
0.57
5.15
1.86
Less: Write backs on account of amounts writen off during the year, as per contra
4.57
1.60
0.58
0.26
72.18
47.76
131.92
47.84
160.05
68.95
424.37
273.70
797.13
606.61
Ferrous metal
Non-ferrous metal
Components
Tyres and tubes
Others
2012
102.36
108.31
0.51
0.68
12,713.42
12,610.07
657.48
673.24
62.66
62.36
13,536.43
13,454.66
147
Notes to consolidated financial statements for the year ended 31 March 2013 (Contd.)
19 Purchase of traded goods
(` In Crore)
2013
Vehicles
Auto spare parts
2012
2.79
861.97
757.01
864.76
757.01
20 (Increase)/decrease in inventories
(` In Crore)
2012
(Increase)/
decrease
26.56
26.67
0.11
255.20
287.76
32.56
2013
1.51
(1.51)
11.97
17.26
5.29
126.13
122.03
(4.10)
421.37
453.72
32.35
26.67
26.20
(0.47)
287.76
252.83
(34.93)
17.26
10.42
(6.84)
122.03
78.62
(43.41)
453.72
368.07
(85.65)
32.35
(85.65)
2012
501.63
431.95
27.72
24.72
68.92
49.63
51.66
43.88
649.93
550.18
148
Notes to consolidated financial statements for the year ended 31 March 2013 (Contd.)
22 Finance costs
(` In Crore)
Interest expense
2013
2012
1.19
22.79
1.19
22.79
23 Other expenses
(` In Crore)
2013
2012
124.21
110.84
121.57
102.09
6.27
12.33
Rent
11.77
13.46
Repairs to buildings
30.68
23.99
Repairs to machinery
95.59
73.77
Other repairs
4.51
5.11
Insurance
3.56
2.80
6.31
3.42
Payment to auditor
1.14
1.20
0.31
0.24
1.05
0.93
37.49
26.12
164.96
181.73
69.22
16.75
12.55
255.60
274.25
50.90
50.44
202.84
160.68
81.95
91.32
44.52
37.56
29.64
36.72
Donations
0.01
10.00
4.65
1.70
4.57
1.60
0.08
0.10
7.04
7.49
4.92
9.95
2.14
2.14
0.66
0.65
6.03
1,375.69
1,257.91
149
Notes to consolidated financial statements for the year ended 31 March 2013 (Contd.)
24 Exceptional item
(` In Crore)
2013
2012
(134.00)
(134.00)
25
Notes to these consolidated financial statements are intended to serve as a means of informative disclosure and a guide to
better understanding of the consolidated position of the companies. Recognising this purpose, the Company has disclosed
only such notes from the individual financial statements, which fairly present the needed disclosures.
26
The accounting policies of the parent are best viewed in its independent financial statements, note 1. Differences in
accounting policies followed by the other entities consolidated have been reviewed and no adjustments have been made,
since the impact of these differences is not significant.
27
Consolidated contingent liability is same as contingent liability of standalone Bajaj Auto Ltd.
28
Consolidated capital commitments are same as capital commitments of standalone Bajaj Auto Ltd.
29
Consolidated related party transactions are same as related party transactions of standalone Bajaj Auto Ltd.
30 Deferred taxes
(` In Crore)
2013
2012
Liabilities
271.65
206.34
Assets
189.96
196.93
81.69
9.41
Net
150
Notes to consolidated financial statements for the year ended 31 March 2013 (Contd.)
31 Additional financial information
Statement of additional financial information, directed to be disclosed as a condition put forth by the Ministry of Corporate
Affairs for grant of exemption from the applicability of section 212(1) of the Companies Act, 1956, is given below:
a)
b)
Bajaj Auto
International
Holdings BV
(Consolidated)
154.14
1,376.00
Other reserves
(167.39)
20.92
c)
Total assets
54.38
1,396.94
d)
Total liabilities
54.38
1,396.94
e)
Investments*
f)
Turnover
g)
h)
i)
j)
Proposed Dividend
847.19
84.19
(23.84)
83.49
5.86
(29.70)
83.49
33 Miscellaneous
` 1 crore is equal to ` 10 million.
J Sridhar
Company Secretary
Rahul Bajaj
Madhur Bajaj
Rajiv Bajaj
Chairman
Vice Chairman
Managing Director
Sanjiv Bajaj
D S Mehta
Kantikumar R Podar
D J Balaji Rao
S H Khan
Suman Kirloskar
Naresh Chandra
Nanoo Pamnani
Manish Kejriwal
P Murari
Niraj Bajaj
Shekhar Bajaj
Directors
151
Business
Responsibility Report
Section A
1.
L-65993PN2007PLC/30076
2.
3.
Registered address
4.
Website
www.bajajauto.com
5.
E-mail ID
brr.response@bajajauto.co.in
6.
7.
Automobile
8.
9.
10.
Section B
4
India and 57 countries across
the world
1.
289.37 crore
2.
20,792.74 crore
3.
3,043.57 crore
4.
5.
Section C
Other details
Section D
BR Information
1.
2.
Principle-wise BR Policy/policies
3.
Governance related to BR
Section E
Principle-wise performance
Madhur Bajaj,
Vice Chairman
Refer main report
1. Preamble
Bajaj Auto Ltd. (BAL) presents its first Business Responsibility Report (BRR) for the financial
year 2012-13, as per the framework suggested by the Securities and Exchange Board of India
(SEBI) in its circular of August 2012.1
With presence in the sports and commuter motorcycle segments and the commercial vehicle
segment through key product lines of Pulsar, Discover, Boxer and RE (3 wheeler),
BAL serves the Indian markets through its 791 dealers spanning the expanse of the country.
The manufacturing units are located in the Industrial estates of Waluj (Aurangabad) and
Chakan (Pune) in Maharashtra and Pantnagar in Uttarakhand.
BAL exports to 57 countries across Latin America, Africa, South Asia, Middle East and Europe.
In the export markets, BAL has a network of dealers and distributors for assembly, sales,
marketing and service.
BALs subsidiaries do not directly participate with BR initiatives of the Company.
But, technological and other best practices are shared between the companies and
its subsidiaries.
b. Improved engine oil: In January 2010, BAL introduced the Bajaj Genuine Oil,
Bajaj DTSi-10,000 for all its 4-stroke motorcycles. With this newly developed product, the
consumption of engine oil halved, from requiring replacement once every 5,000 km to once
every 10,000 km. Since then, BAL has so far sold 10,785 kilo liters of Bajaj Genuine Oil to
consumers since its launch in 2009-10, thereby saving an equivalent quantity of oil during
the product use.
c. Power to weight ratio: High strength material and plastics are used alongside design
process and analysis to optimise vehicle weight and strength. As an example, the new
Pulsar 200 NS has a 20% improved power to weight ratio compared to Pulsar 220.
Lighter vehicles consume less fuel reducing environmental impact.
One of the environmental impacts from vehicle use is emissions. The regulatory norms
on emissions are becoming increasingly stringent. BALs vehicles are compliant with the
current BS III norms in India.
Sourcing:
In 2007, BAL formed its vendor association Bajaj Auto Vendor Association (BAVA) with an
objective to facilitate prevention of interface losses between vendors and BAL. It is the
first-of-its-kind in the automobile manufacturing industry in India. The other objective
of forming the BAVA is enabling vendor improvement activities steered through BAVA
management and executive committees. As of 31 March 2013, 130 out of total 211 vendor
groups are part of BAVA.
To further BAVA initiatives, BAL adopted a Green Purchasing Policy endorsed by the Head
of Purchase. The policy declares BALs commitment to conservation of energy, water and
environment across its supply chain and states that the Company will endeavor to source its
parts from vendors that adopt environment friendly technologies.
Following the policy, BAL has worked with BAVA to develop a road map for green
procurement. The road map specifies targets against environmental parameters such as
ISO/OHSAS certification, Greenery plantation, reducing consumption of power (electrical
energy), reduction in water consumption, recycling and reducing packaging material. BAL helps
identify external consultant to guide vendors for improvements in these areas and seeks
disclosures from BAVA members on their performance. So far, 55 vendors have been certified.
From the various initiatives adopted by the vendors, the casting vendor cluster has projected
a savings potential of 33,02,470 kWh in a year.
BAL supports its vendors for continuous improvements on quality, cost and delivery
performance in the following ways:
1. Direct assistance by deploying BAL engineers at vendor plants to identify gaps, carry out
improvement and monitor the same till sustenance is achieved and transferred to vendor.
2. Specific training programs on Total Productive Maintenance (TPM) implementation
for vendor plant managers at BAL plant and to vendor front line workers for skill and
knowledge improvement at BAL Technology Centre.
3. BAVA forums to provide guidance on preventing interface losses and promote improvement
culture among small cluster groups.
4. Extending services of BAL employed Industry/Process Experts for
Non-Proprietary category.
5. Assisting Automation Projects in Non-Proprietary category, which also has reduced their
dependency on skilled manpower.
By working with vendors to develop capability, BAL benefits as the improved technologies
are developed with the existing vendors at better cost efficiencies. The benefits are dual the
vendors are enabled access to global markets, with upgraded technology. BAL promotes
BAVA members to adopt TPM way of working and encourages their tier 1 vendors to extend
the TPM way to tier 2 vendors as well. The TPM policy commits to continuous improvement
In the operations of BAL and its partners demonstrating the responsibility of BAL
across its value chain.
In FY2013, 95.7% of the total supplier value of BAL was from procurement within India.
Taking the unique cluster concept, in the Pantnagar plant, 17 of BALs key vendors are situated
around the unit within 1.5 km of the plant. The transportation footprint in BALs supply chain
is greatly reduced and economic development is created through increased local sourcing.
This is therefore an important aspect of sustainable sourcing.
Of the non-hazardous solid waste generated by BAL, as much as 97.8% is recyclable. Of this,
a portion of the canteen waste is utilised in biogas production at Akurdi, and the rest of the
waste is sent to waste disposal contractors or authorised resellers. The hazardous wastes are
disposed as per the Pollution Control Board norms.
4. Employees well-being
In line with its growth plans, BALs permanent workforce grew from 7,557 as on
31 March 2011 to 8036 as of 31 March 2013. Of this, 51 are women. In the same period, the
number of associated workforce including trainees, apprentices and contract employees went
up from 564 to 877. The count of differently-abled employees stands at 25 as on
31 March 2013. At all locations of operation of BAL, there are worker unions recognised by
the management. 63.8% of BAL permanent employees are unionised.
High-performance culture in BAL is enabled by its performance management system that
ensures objective goal setting, quarterly evaluation, transparent rewards and constructive
feedback. The quarterly performance appraisal system that covers a fifth of its permanent
employees ensures alignment of goals across functions and rewards high performers every
quarter. All employees are covered under the annual performance appraisal that takes into
account both quantitative and qualitative parameters. The objectivity, transparency and
fairness of the process is ensured by the heads of each function along with the Human
Resources department and Managing Director.
Human Resource Development at BAL is aligned to its strategy of differentiation and
continuous improvement. A structured approach to skill and competence upgradation of
employees has been put in place. Training is imparted through a variety of approaches that
include class-room, on-the-job and outbound training, as well as employee tours to other
manufacturing facilities. BAL imparts several aspects of safety training to all new employees
at induction. As of 31 March 2013, from the permanent workforce, 41.8% received training.
Further, 70.6% of BALs permanent women employees and 5% of the employees with
disabilities received training in FY2013. There were no complaints relating to child labour,
forced labour, involuntary labour and sexual harassment in FY2012 and FY2013, and
pending as of end FY2013.
Employee care is a key priority in BAL and HR policies are periodically reviewed and
benchmarked. This year, the travel policy was revised with a view to ensuring employee
comfort, safety and productivity while being on outstation tours. The hospitalisation policy
has been comprehensively reviewed, resulting in the new Hospitalisation Benefit Scheme
effective April 2013. A higher level of employee engagement has resulted in significantly
lower levels of attrition in FY2013.
5. Stakeholder engagement
Community has always been considered an integral stakeholder by the Bajaj Group.
Through the Bajaj Groups Public Charitable Trusts (over 40 in number), the Bajaj Group
Companies contribute towards community development by working together with the weaker
sections of society to achieve growth and development.
BAL is a signatory to CIIs Affirmative Action for the Scheduled Castes and Scheduled Tribes
communities. This is a voluntary commitment to support the Indian Government and civil
society in an endeavor to ensure equal opportunity to all. As a part of this subscription,
BAL has adopted a Code of Conduct for Affirmative Action since 2006. As per this Code,
in case of equal business offers, the Company will select a business partner belonging to a
socially disadvantaged section of society.
Employee category
Permanent
employees
Temporary
employees
(including trainees
and contract
employees)
684
1,347
11
100
177
378
10
25
37
125
BAL has set up an Anti-Retroviral Treatment centre (ART) for treatment of patients with
HIV/AIDS in the Yeshwantrao Chavan Municipal Hospital in Pimpri as a part of the tripartite
agreement of the National AIDS Control Organisation, CII and BAL. This centre is managed by
BALs employees, and has become one of the largest such centres run by an industry, with
over 3900 registered patients. The centre has been recognised as one of the best ART centres
in India, owing to the quality healthcare and group counseling facilities.
In 2012, BAL initiated a structured stakeholder engagement for the purpose of the business
responsibility reporting. As a first step, senior representatives from internal functions
were engaged through an awareness workshop. Following this workshop, representatives
were asked to identify key stakeholders to each of their functions. From this process,
key stakeholders to BAL were systematically identified. These emerged to be customers,
shareholders, employees, suppliers and dealers
As mandated by listing agreements, all shareholders receive communication on the Companys
performance through the annual report. The Board of Directors meets quarterly or at defined
periodicity with the management. The Board also reviews the 'Compliance Reports' for all legal
requirements that are submitted by the Management. The legal compliances and conformance
to the clauses in the listing agreement are declared and communicated through BALs annual
report. Shareholders can reach out to the Board and the Company through the Shareholders
and Investors Committee.
The management of BAL convenes regularly through meetings of the Corporate Management
Committee, Business Review Committee and Brand Management Committee for reviews,
strategy, product plans and launches throughout the financial year. Key information such as
Company strategy and focus areas are disseminated to the employees through Communication
meets, conducted twice yearly.
6. Human rights
BAL complies with all laws and regulations of the land. Legal compliance report is placed
before the Board on a quarterly basis. Furthering this, BAL has signed the Pledge to Fight
HIV Discrimination and Stigma of the Global Business Coalition on HIV/AIDS, Tuberculosis and
Malaria as a commitment to fight the discrimination and stigma at the BAL workplace.
BAL does not condone discrimination of any form at the workplace. No complaints on
violation of Human Rights were received during the financial year.
There were no complaints relating to child labour, forced labour, involuntary labour and sexual
harassment in FY2012 and FY2013.
7. Environment
BAL has adopted the concept of TPM3 to build and continuously improve its core
competencies. For all plants, TPM audits are conducted by external experts regularly.
Currently, all plants have received the TPM Excellence Award. In addition, Chakan and Waluj
plants have also received the Award for Excellence in Consistent TPM Commitment from
JIPM, Japan. Through the TPM initiative, all plants have made significant progress towards
lean manufacturing.
The CoC covers aspects of reducing negative impact on the environment, eliminating waste
and conserving resources. The Safety Health and Environment Policy4 endorses minimising
generation of waste and conserving resources through better technology and practices for
prevention of pollution. By conducting in an environmentally conscious and responsible
manner, the Company is making efforts to tackle the larger environmental issues. The Green
Purchasing Policy and the TPM way of working extend environmental consciousness and
improved efficiency respectively to the supply chain. All BAVA members are to plant two trees
per employee every year.
BAL procures wind power from Bajaj Finserv Ltd., which helps in optimum utilisation of
energy and to achieve sustainable environment. At Akurdi, biogas from canteen waste is used
as a fuel for canteen operations.
In recognition that water is an important resource and is becoming increasingly scarce, BAL
has focused on water conservation, reuse and recycle at all its plants. Through continuous
improvements, water consumption reduction has been achieved from 6500 m3 per day in
1992-93 to 2200 m3 per day as of this year.
Some of the other initiatives taken up at Waluj and Chakan to reduce water usage in the last
two years include replacement of underground water line to above ground and change to
water saving taps in office blocks and canteens.
The emissions and waste generated from the plants are within the consent limits as per
Pollution Control Board. No show-cause or other notice or summons or any other document
has been served on BAL by a Government authority, Tribunal or Court or any other party
during FY2013.
8. Policy advocacy
BAL has representation in national and international industry and trade associations.
BAL actively participates in putting forth its views on new standards or regulatory
developments pertaining to the automotive manufacturing industry as well as industry at
large, broadly in areas concerning Economic reforms, Best business practices, Corporate
Governance, Corporate Social Responsibilities, etc. Some of the trade/business associations
where BAL is a member are listed below.
Key associations:
All India Management Association
EEPC India
9. Inclusive growth
In going Beyond Profits, the social and welfare objectives of the Bajaj Group are being
fulfilled through the Trusts and Foundations (over 40 in number) established by the Group.
The Trusts and Foundations are key stakeholders of BAL. The activities carried out are in
the areas of education, health, women empowerment, self-reliance, rural development and
environment & natural resources.
The guiding philosophy is primarily to assist the disadvantaged in a way such that capacity is
built for self-reliance and sustenance. All activities therefore are carried out with an objective
to enable sustainable development.
A comprehensive publication Beyond Profits covering the various community development
activities of BAL and the Bajaj Group is available on http://www.jamnalalbajajfoundation.
org/the_foundation/beyond_profits. The key contributions by Bajaj Group impacting the said
principle of inclusive growth and equitable development are given below
1. Enabling social and economic growth through its operations
BAL has contributed to the local economic growth by operating profitably. The tax
from BAL is a significant source of income to the local Gram Panchayat. The sizeable
and consistent contribution by way of taxes has enabled the Panchayats/Municipal
Corporations to not only pay the basic infrastructure bills but also take up significant
infrastructure development projects such as sanitation and roads.
JBGVS acts as a catalyst for the participation of rural community in improving their quality
of life, eliminating poverty, empowering women, development of human and natural
resources, and promoting ecological balance. As of now, JBGVS works in 41 villages in
Pune, 13 in Aurangabad, 10 in Wardha and 11 villages in Sikar, Rajasthan. The BAL plants
work closely with the Jankidevi Bajaj Gram Vikas Sanstha (JBGVS) towards sustainable
development of villages in the area. An impact assessment study in villages across
Aurangabad and Pune district was taken up by BAL recently. The Trust not only aids in
women empowerment by training women to use advanced technology for food grain
storage but also helps in securing loans for women.
Kamalnayan Bajaj Hospital in Aurangabad is one of the few leading healthcare providers
in the Marathwada region, which offers treatment free of cost for those below the poverty
line and at subsidised rates for others. The Hospital has introduced state-of-the-art medical
facilities to the Marathwada region, which was otherwise only available in cities such
as Pune and Mumbai. The Kamalnayan Bajaj Nursing College has also been established
alongside to train nursing professionals. The College provides scholarships to support
students with financial constraints.
BAL provides its employees opportunities to contribute to the society in course of their
employment. It has tied-up with Give India, wherein employees can donate any sum
towards its activities in social empowerment. As many as 375 of employees (level 3 and
above) are contributing through this provision.
Blood donation camps are also organised at the offices and plants, on a regular basis.
566 employees participated in the blood donation camps across BAL plants.
BAL employees also support activities of the Trusts and Foundations of the Bajaj Group by
overseeing operations and volunteering their time.
Under the Public Private Partnership (PPP) scheme of the Government of India, the
Company has undertaken upgradation of 4 Industrial Training Institutes (ITIs)- 2 in Pune,
1 in Aurangabad and 1 in Pantnagar.
For further details on our CSR initiatives, please refer to our CSR Report section in the
annual report.